CITIFUNDS INTERNATIONAL TRUST, 497, 2000-09-15

CITIFUNDS INTERNATIONAL TRUST
497, 2000-09-15

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<PAGE>
Filing made under Rule 497(c)
File Nos. 33-36556 and 811-6154

[Logo] Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed.(SM)

PROSPECTUS

International Large Cap Fund
CLASS A, B, L AND Y SHARES
----------------------------
September 11, 2000

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INVESTMENT PRODUCTS: NOT FDIC INSURED o NO BANK GUARANTEE o MAY LOSE VALUE
--------------------------------------------------------------------------------

The Securities and Exchange Commission has not approved or disapproved these
securities or determined whether this prospectus is accurate or complete. Any
statement to the contrary is a crime.

<PAGE>

INTERNATIONAL LARGE CAP FUND

Contents

Investments, risks and performance ........................................ 2
More on the fund's investments ............................................ 10
Management ................................................................ 11
Choosing a class of shares to buy ......................................... 12
Comparing the fund's classes .............................................. 14
Sales charges ............................................................. 15
More about deferred sales charges ......................................... 18
Buying shares ............................................................. 19
Exchanging shares ......................................................... 20
Redeeming shares .......................................................... 22
Other things to know about share transactions ............................. 24
Dividends, distributions and taxes ........................................ 26
Share price ............................................................... 27
Financial highlights ...................................................... 28

<PAGE>

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INVESTMENTS, RISKS AND PERFORMANCE
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INVESTMENT OBJECTIVE

The fund seeks to provide long-term capital growth. Dividend income, if any,
is incidental to this goal.

PRINCIPAL INVESTMENT STRATEGIES

KEY INVESTMENTS The fund invests primarily in the common stocks of foreign
companies that the fund's manager believes have above-average prospects for
growth, including companies in developing countries. Generally, the fund
invests in a number of different countries and, under normal circumstances,
the fund invests at least 65% of its assets in large cap equity securities of
companies in at least three foreign markets.

The fund usually invests in securities listed on securities exchanges,
although it may also purchase securities which are not registered for sale to
the general public, or, to a limited extent, securities that are not readily
marketable. The fund may invest directly in foreign securities or may invest
in depositary receipts.

In addition to common stocks, the fund may also invest in other securities
including rights to purchase common stocks, preferred stock or warrants, and
also, to a limited extent, purchase shares of other investment companies,
including closed end investment companies, that invest in foreign securities.

The fund may, but is not required to, enter into forward currency transactions
to buy or sell currencies at a future date. The fund may enter into these
forward currency contracts to:

o Settle transactions in securities quoted in foreign currencies

o Attempt to protect against the economic impact of adverse changes in the value
of the U.S. dollar or other currencies

SELECTION PROCESS The manager looks for well-established companies typically
with capitalizations of $750 million or more, superior management teams and
histories of above-average revenues and earnings growth which appear to be
reasonably valued compared to their long-term earnings potential. The manager
uses fundamental analysis to find companies that it believes have growth
potential, and looks first at a particular company and then at the country in
which the company is located and the industry in which the company
participates. The manager eliminates stocks that it believes are overpriced
relative to a company's financial statements and projections. The manager then
analyzes each company to find those believed to have superior management
teams, solid product lines, strong competitive positioning, attractive cash
flows and histories of above-average revenues and earnings growth. The manager
seeks opportunities to invest in foreign economies that are growing faster
than the U.S. economy.

PRINCIPAL RISKS OF INVESTING IN THE FUND

Investing in foreign issuers may involve unique risks. Some of these risks do
not apply to larger more developed countries. However, these risks may be more
pronounced to the extent the fund invests in emerging market countries or
significantly in any one country. Investors could lose money on their
investment in the fund, or the fund may not perform as well as other
investments, if:

o Foreign securities prices decline

o Adverse governmental action or political, social, economic or market
instability affects a foreign country or region

o The currency in which a security is priced declines in value relative to the
U.S. dollar

o The manager's judgement about the attractiveness, value or potential
appreciation of a particular security proves to be incorrect

o Foreign withholding taxes reduce the fund's returns

o The economies of foreign countries grow at a slower rate than expected or
experience a downturn or recession

In addition, foreign investing involves the following risks:

o Many foreign countries the fund invests in have markets that are smaller, less
liquid and more volatile than markets in the U.S. In a changing market, the
manager may not be able to sell the fund's portfolio securities in amounts and
at prices it considers reasonable

o In some foreign countries, less information is available about foreign issuers
and markets because of less rigorous accounting and regulatory standards than
in the U.S.

o Foreign equity securities may trade at price- earnings multiples that are
higher than those of comparable U.S. companies, and that may not be
sustainable. As a result, there may be rapid changes in the value of foreign
securities

o Enforcing legal rights may be difficult, costly and slow and there may be
special problems enforcing claims against foreign governments

o Some foreign currency values may be volatile and there is the possibility of
governmental controls on currency exchanges or governmental intervention in
currency markets which may prevent the fund from realizing value in U.S.
dollars from its investment in foreign securities

o There may be other governmental or non- governmental actions resulting in
expropriations of assets, confiscatory taxation, and limitations on the use or
transfer of assets by the fund or the issuers of securities.

Because the value of a depositary receipt is dependent upon the market price
of an underlying foreign security, depositary receipts are subject to most of
the risks associated with investing in foreign securities directly.

Economic and Monetary Union (EMU) and the introduction of a single European
currency (the Euro), which began on January 1, 1999, may increase
uncertainties relating to investment in European markets. Among other things,
EMU entails sharing a single currency and official interest rate and adhering
to limits on government borrowing by participating countries. EMU is driven by
the expectation of economic benefits; however, there are significant risks
associated with EMU. Monetary and economic union on this scale has not been
attempted before, and there is uncertainty whether participating countries
will remain committed to EMU in the face of changing economic conditions.

The fund's growth-oriented investment style may increase the risks of
investing in the fund. Growth securities typically are quite sensitive to
market movements because their market prices tend to reflect future
expectations. When it appears those expectations will not be met, the prices
of growth securities typically fall. Growth securities may also be more
volatile than other investments because they generally do not pay dividends.

To the extent that the fund enters into forward foreign currency transactions,
it may not fully benefit from or may lose money on the transactions if changes
in currency rates do not occur as anticipated or do not correspond accurately
to changes in the value of the fund's holdings, or if the counterparty
defaults. Such transactions may also prevent the fund from realizing profits
on favorable movements in exchange rates. The fund's ability to use currency
exchange contracts successfully depends on a number of factors, including the
contracts being available at prices that are not too costly, the availability
of liquid markets, and the ability of the manager to accurately predict the
direction of changes in currency exchange rates.

See page 10 for more information about the fund's investments and the risks of
investing in the fund.

WHO MAY WANT TO INVEST The fund may be an appropriate investment if:

o You want to direct a portion of your overall investment portfolio to
securities of non-U.S. companies and you are prepared to accept the risks of
international investing

o You are prepared to accept significant fluctuations in share price and
possible losses

o You are not seeking current income

o Your investment horizon is longer term -- typically at least five years

RISK RETURN BAR CHART

This bar chart indicates the risks of investing in the fund by showing changes
in the fund's performance from year to year. Past performance does not
necessarily indicate how the fund will perform in the future. This bar chart
shows the performance of the fund's Class A shares for each of the years
indicated. Class B, L and Y shares would have different performance because of
their different expenses. The chart does not reflect sales charges, which
would reduce your return. The chart does reflect certain fee waivers or
reimbursements, which if reduced or eliminated may cause the fund's
performance to go down.

TOTAL RETURN FOR CLASS A SHARES

92 (1.45)%
93 29.82%
94 (11.46)%
95 18.08%
96 2.59%
97 5.15%
98 17.62%
99 35.66%

CALENDAR YEARS ENDED DECEMBER 31

QUARTERLY RETURNS* (FOR THE YEARS COVERED BY THE BAR CHART):

Highest: 28.09% in 4th quarter 1999; Lowest: (14.04)% in 3rd quarter 1998.
Year to date: (8.01)% through 6/30/00.

* The returns shown for Class A shares include returns for periods before the
creation of share classes on January 4, 1999.

<PAGE>

RISK RETURN TABLE

This table indicates the risks of investing in the fund by comparing the
average annual total return of each class for the periods shown with that of
the MSCI EAFE Index. The table assumes imposition of the maximum sales charge
currently applicable to the class, redemption of shares at the end of the
period, and reinvestment of distributions and dividends. The table also
reflects certain fee waivers or reimbursements, which if reduced or eliminated
may cause the fund's performance to go down.

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AVERAGE ANNUAL TOTAL RETURNS
CALENDAR YEARS ENDED DECEMBER 31, 1999
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CLASS 1 YEAR 5 YEARS SINCE INCEPTION INCEPTION DATE
A* 28.87% 14.06% 9.45% 3/1/91
B 25.35% n/a 25.35% 1/4/99
L** n/a n/a n/a **
Y** n/a n/a n/a **
MSCI EAFE
Index 27.30% 13.15% 10.20% ***

* The returns for Class A in the table have been adjusted to reflect maximum
front end sales charge currently applicable to the Class A shares.
** Class L and Class Y shares are newly offered.
*** Index comparison begins on 3/1/91.

<PAGE>

FEE TABLE

This table sets forth the fees and expenses you may pay if you invest in fund
shares.

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SHAREHOLDER FEES
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(FEES PAID DIRECTLY FROM
YOUR INVESTMENT) CLASS A CLASS B CLASS L CLASS Y

Maximum sales charge (load)
imposed on purchases
(as a % of offering price) 5.00% None 1.00% None

Maximum deferred sales charge
(load) (as a % of the lower of net
asset value at purchase or
redemption) None(1) 5.00% 1.00% None

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ANNUAL FUND OPERATING EXPENSES(2)
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(EXPENSES DEDUCTED FROM
FUND ASSETS) CLASS A CLASS B CLASS L(3) CLASS Y(3)

Management fee 1.00% 1.00% 1.00% 1.00%

Distribution and service
(12b-1) fees 0.15% 1.00% 1.00% None

Shareholder services 0.25% 0.15% None None

Administrative and
other services 0.55% 0.55% 0.55% 0.55%

Total annual fund
operating expenses* 1.95% 2.70% 2.55% 1.55%

* Because some of the Fund's
expenses were waived or
reimbursed, actual total
operating expenses for the
prior year were (or, in the
case of Class L or Y
shares, would have been): 1.75% 2.50% 2.35% 1.35%

These fee waivers and reimbursements may be reduced or terminated at any time.

(1) You may buy Class A shares in amounts of $1,000,000 or more at net asset
value (without an initial sales charge) but if you redeem those shares
within 12 months of their purchase, you will pay a deferred sales charge
of 1.00%.

(2) The fund invests in securities through an underlying mutual fund. This
table reflects the expenses of the fund and the underlying mutual fund.

(3) Because Class L and Y shares are newly offered, "Other Expenses" have been
estimated based on expenses incurred by Class A shares.

<PAGE>

EXAMPLE

This example helps you compare the costs of investing in the fund with the
costs of investing in other mutual funds. Your actual costs may be higher or
lower. The example assumes:

o You invest $10,000 in the fund for the periods shown

o Your investment has a 5% return each year - the assumption of a 5% return is
required by the SEC for the purposes of this example and is not a prediction
of the fund's future performance

o You reinvest all distributions and dividends without a sales charge

o The fund's operating expenses, without waivers, remain the same

<TABLE>
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NUMBER OF YEARS YOU OWN YOUR SHARES
---------------------------------------------------------------------------------------------------------

<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <C> <C>
Class A
(with or without redemption) $688 $1,082 $1,500 $2,661

Class B
(redemption at end of period) $773 $1,138 $1,530 $2,851

Class B
(no redemption) $273 $ 838 $1,430 $2,851

Class L
(redemption at end of period) $456 $ 886 $1,442 $2,956

Class L
(no redemption) $356 $ 886 $1,442 $2,956

Class Y
(with or without redemption) $158 $ 490 $ 845 $1,845
</TABLE>

<PAGE>

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MORE ON THE FUND'S INVESTMENTS
--------------------------------------------------------------------------------

Although the fund invests primarily in equity securities, it may, but is not
required to, invest in other foreign securities including debt securities and
convertible securities.

DEBT SECURITIES Long-term debt securities must be investment grade when the
fund purchases them meaning they must be rated Baa by Moody's or BBB by
Standard & Poor's, or if unrated, of comparable quality in the manager's
opinion. After the fund buys a bond, if the credit quality of the bond
deteriorates below investment grade, the fund may continue to hold the bond,
commonly known as a junk bond, but the manager will consider the change in
rating in deciding whether to keep the security. Generally, the value of debt
securities will decline if interest rates rise, the credit rating of the
security is downgraded or the issuer defaults on its obligation to pay
principal or interest. The prices of lower rated securities, especially junk
bonds, often are more volatile than those of higher rated securities, and the
security may be difficult to sell.

CONVERTIBLE SECURITIES Convertible securities, which are debt securities that
may be converted into stock, are subject to the market risks of stocks and,
like debt securities, are also subject to interest rate risk and the credit
risk of their issuers.

PORTFOLIO TURNOVER The fund may engage in active and frequent trading to
achieve its principal investment strategies. This may lead to the realization
and distribution to shareholders of higher capital gains, which would increase
their tax liability. Frequent trading also increases transaction costs, which
could detract from the fund's performance. The "Financial highlights" section
of this Prospectus shows the fund's historical portfolio turnover rate.

CASH MANAGEMENT The fund may hold cash pending investment, and may invest in
money market instruments, repurchase agreements and reverse repurchase
agreements for cash management purposes.

INVESTMENT STRUCTURE The fund does not invest directly in securities but
instead invests through an underlying mutual fund, having the same investment
goals and strategies as the fund. The underlying mutual fund buys, holds and
sells securities in accordance with these goals and strategies. Unless
otherwise indicated, references to the fund in this Prospectus include the
underlying fund. The fund may stop investing the its underlying mutual fund at
any time, and will do so if the fund's Trustees believe that to be in the best
interests of the fund's shareholders. The fund could then invest in another
mutual fund or pooled investment vehicle or invest directly in securities.

DEFENSIVE INVESTING The fund may depart from its principal investment
strategies in response to adverse market, economic or political conditions by
taking temporary defensive positions in all types of money market and short-
term debt securities. If the fund takes a temporary defensive position, it may
be unable to achieve its investment goal.

The fund may also use other strategies and invest in other securities that are
described, along with their risks, in the Statement of Additional Information
("SAI"). However, the fund may not use all of the strategies and techniques or
invest in all of the types of securities described in this Prospectus or in
the SAI. Also note that there are many other factors that could adversely
affect your investment and that could prevent the fund from achieving its
goals, which are not described here.

The fund's goals and strategies may be changed without shareholder approval.

--------------------------------------------------------------------------------
MANAGEMENT
--------------------------------------------------------------------------------

MANAGER The fund draws on the strength and experience of Citibank N.A., the
investment manager of the fund. Subject to policies set by the fund's
Trustees, the manager makes investment decisions. The manager has been
managing money since 1822. With its affiliates, it currently manages more than
$351 billion in assets worldwide.

Citibank, with headquarters at 153 East 53rd Street, New York, New York, is a
wholly-owned subsidiary of Citigroup Inc. Citibank is an affiliate of Salomon
Smith Barney.

Citibank and its affiliates, including their directors, officers or employees,
may have banking and investment banking relationships with the issuers of
securities that are held in the fund. They may also own the securities of
these issuers. However, in making investment decisions for the fund, the
manager does not obtain or use material inside information acquired by any
division, department or affiliate of the manager in the course of those
relationships. The manager and its affiliates may have loans outstanding that
are repaid with proceeds of securities purchased by the fund.

Matthew Bowyer, a Vice President of Citibank, has managed the fund since
February 1999. Mr. Bowyer is a Senior Portfolio Manager and Cross Border
Equity Strategist who has been responsible for managing global equity and
balanced portfolios at Citibank since mid-1996. From 1995 through mid-1996 he
ran a quantitative research group, providing portfolio and market analysis to
Citibank's equity and fixed income teams in London. Mr. Bowyer has 14 years of
investment management experience at Citibank.

MANAGEMENT FEE For the fund's fiscal year ended December 31, 1999, Citibank
received management fees totaling 1.00% of the fund's average daily net
assets.

DISTRIBUTION PLANS The fund has adopted Rule 12b-1 distribution plans for its
Class A, B and L shares. Under each plan, the fund pays distribution and/or
service fees. These fees are an ongoing expense and, over time, may cost you
more than other types of sales charges.

The distributor may make payments for distribution and/or shareholder
servicing activities out of its past profits and other available sources. The
distributor may also make payments for marketing, promotional or related
expenses to dealers. The amount of these payments is determined by the
distributor and may be substantial. The manager or an affiliate may make
similar payments under similar arrangements.

TRANSFER AGENT AND SHAREHOLDER SERVICING AGENT Citi Fiduciary Trust Company
serves as the fund's transfer agent and shareholder servicing agent (the
"transfer agent"). The transfer agent has entered into a sub-transfer agency
and services agreement with PFPC Global Fund Services to serve as the fund's
sub-transfer agent (the "sub-transfer agent"). The sub-transfer agent will
perform certain functions including shareholder record keeping and accounting
services.

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CHOOSING A CLASS OF SHARES TO BUY
--------------------------------------------------------------------------------

You can choose among four classes of shares: Classes A, B, L and Y. Each class
has different sales charges and expenses, allowing you to choose the class
that best meets your needs. Which class is more beneficial to an investor
depends on the amount and intended length of the investment.

o If you plan to invest regularly or in large amounts, buying Class A shares may
help you reduce sales charges and ongoing expenses

o For Class B shares, all of your purchase amount and, for Class L shares, more
of your purchase amount (compared to Class A shares) will be immediately
invested. This may help offset the higher expenses of Class B and Class L
shares, but only if the fund performs well

o Class L shares have a shorter deferred sales charge period than Class B
shares. However, because Class B shares convert to Class A shares, and Class L
shares do not, Class B shares may be more attractive to long-term investors

You may buy shares from:

o Certain broker-dealers, financial intermediaries, financial institutions or a
distributor's financial consultants (each called a "Service Agent")

o The fund, but only if you are investing through certain qualified plans or
Service Agents

All classes of shares are not available through all Service Agents. You should
consult your Service Agent for further information.

INVESTMENT MINIMUMS Minimum initial and additional investment amounts vary
depending on the class of shares you buy and the nature of your investment
account.

<TABLE>
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<CAPTION>
INITIAL ADDITIONAL
---------------------------------------------------------------------------------------------------

CLASSES A, B, L CLASS Y ALL CLASSES

<S> <C> <C> <C>
General $1,000 $15 million $50

IRA, Self Employed Retirement Plans, Uniform
Gift to Minor Accounts $ 250 $15 million $50

Qualified Retirement Plans* $ 25 $15 million $25

Simple IRAs $ 1 n/a $ 1

Monthly Systematic Investment Plans $ 25 n/a $25

Quarterly Systematic Investment Plans $ 50 n/a $50

* Qualified Retirement Plans are retirement plans qualified under Section 403(b)(7) or
Section 401(a) of the Internal Revenue Code, including 401(k) plans
</TABLE>

<PAGE>

<TABLE>
------------------------------------------------------------------------------------------------------------------------------
COMPARING THE FUND'S CLASSES
------------------------------------------------------------------------------------------------------------------------------

Your Service Agent can help you decide which class meets your goals. The Service Agent may receive different compensation
depending upon which class you choose.

------------------------------------------------------------------------------------------------------------------------------
CLASS A CLASS B CLASS L CLASS Y
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
KEY FEATURES o Initial sales o No initial o Initial sales o No initial or
charge sales charge charge is lower deferred sales
o You may qualify o Deferred sales than Class A charge
for reduction or charge declines o Deferred sales o Must invest at
waiver of initial over time charge for only least $15 million
sales charge o Converts to 1 year o Lower annual
o Lower annual Class A after 8 o Does not convert expenses than the
expenses than years to Class A other classes
Class B and o Higher annual o Higher annual
Class L expenses than expenses than
Class A Class A
------------------------------------------------------------------------------------------------------------------------------
INITIAL SALES Up to 5.00%; reduced for None 1.00% None
CHARGE large purchases and
waived for certain
investors. No charge for
purchases of $1,000,000
or more
------------------------------------------------------------------------------------------------------------------------------
DEFERRED SALES 1.00% on purchases of Up to 5.00% charged when 1.00% if you redeem None
CHARGE $1,000,000 or more if you redeem shares. The within 1 year of
you redeem within 1 year charge is reduced over purchase
of purchase time and there is no
deferred sales charge
after 6 years
------------------------------------------------------------------------------------------------------------------------------
ANNUAL 0.25% of average daily 1.00% of average daily 1.00% of average daily None
DISTRIBUTION, net assets (after waiver) net assets (after waiver) net assets
SERVICE AND
SHAREHOLDER
SERVICING FEES
------------------------------------------------------------------------------------------------------------------------------
EXCHANGEABLE Class A shares of most Class B shares of most Class L shares of most Class Y shares of most
INTO* Smith Barney funds Smith Barney funds Smith Barney funds Smith Barney funds
------------------------------------------------------------------------------------------------------------------------------
* Ask your Service Agent for the Smith Barney funds available for exchange.
</TABLE>

<PAGE>

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SALES CHARGES
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CLASS A SHARES

You buy Class A shares at the offering price, which is the net asset value
plus a sales charge. You pay a lower sales charge as the size of your
investment increases to certain levels called breakpoints. You do not pay a
sales charge on the fund's distributions or dividends you reinvest in
additional Class A shares.

The table below shows the rate of sales charge that you pay, depending on the
amount that you purchase.

The table below also shows the amount of broker/dealer compensation that is
paid out of the sales charge. This compensation includes commissions and other
fees that Service Agents that sell shares of the fund receive. The distributor
keeps up to approximately 10% of the sales charge imposed on Class A shares.
Service Agents also will receive the shareholder servicing fee payable on
Class A shares at an annual rate equal to 0.25% of the average daily net
assets represented by the Class A shares sold by them.

<TABLE>
<CAPTION>
BROKER/
SALES CHARGE AS A % OF DEALER
------------------------------- COMMISSION
OFFERING NET AMOUNT AS A % OF
AMOUNT OF PURCHASE PRICE (%) INVESTED (%) OFFERING PRICE
----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $25,000 5.00 5.26 4.50
$25,000 but less than $50,000 4.25 4.44 3.83
$50,000 but less than $100,000 3.75 3.90 3.38
$100,000 but less than $250,000 3.25 3.36 2.93
$250,000 but less than $500,000 2.75 2.83 2.48
$500,000 but less than $1,000,000 2.00 2.04 1.80
$1,000,000 or more -0- -0- up to 1.00
</TABLE>

INVESTMENTS OF $1,000,000 OR MORE You do not pay an initial sales charge when
you buy $1,000,000 or more of Class A shares. However, if you redeem these
Class A shares within one year of purchase, you will pay a deferred sales
charge of 1.00%.

QUALIFYING FOR A REDUCED CLASS A SALES CHARGE There are several ways you can
combine multiple purchases of Class A shares of Smith Barney funds to take
advantage of the breakpoints in the sales charge schedule.

o ACCUMULATION PRIVILEGE -- lets you combine the current value of Class A shares
owned

o by you, or

o by members of your immediate family

and for which a sales charge was paid, with the amount of your next purchase
of Class A shares for purposes of calculating the initial sales charge.
Certain trustees and fiduciaries may be entitled to combine accounts in
determining their sales charge.

o LETTER OF INTENT -- lets you purchase Class A shares of the fund and other
Smith Barney funds over a 13-month period and pay the same sales charge, if
any, as if all shares had been purchased at once. You may include purchases on
which you paid a sales charge within 90 days before you sign the letter.

WAIVERS FOR CERTAIN CLASS A INVESTORS Class A initial sales charges are
waived for certain types of investors, including:

o Employees of NASD members

o Investors participating in a fee-based program sponsored by certain
broker-dealers affiliated with Citigroup.

o Investors who redeemed the same number of Class A shares of a Smith Barney
fund in the past 60 days, if the investor's Service Agent is notified

If you want to learn about additional waivers of Class A initial sales
charges, contact your Service Agent or consult the SAI.

CLASS B SHARES

You buy Class B shares at net asset value without paying an initial sales
charge. However, if you redeem your Class B shares within six years of
purchase, you will pay a deferred sales charge. The deferred sales charge
decreases as the number of years since your purchase increases.

<TABLE>
<CAPTION>
YEAR AFTER PURCHASE 1ST 2ND 3RD 4TH 5TH 6TH THROUGH 8TH
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Deferred sales charge 5% 4% 3% 2% 1% 0%
</TABLE>

Service Agents selling Class B shares receive a commission of up to 4.50% of
the purchase price of the Class B shares that they sell, except for sales
exempt from the deferred sales charge. Service Agents also receive a service
fee at an annual rate equal to 0.25% of the average daily net assets
represented by the Class B shares that they have sold.

Class B conversion After 8 years, Class B shares automatically convert into
Class A shares. This helps you because Class A shares have lower annual
expenses. Your Class B shares will convert to Class A shares as follows:

<TABLE>
<CAPTION>
SHARES ISSUED:
SHARES ISSUED: ON REINVESTMENT OF SHARES ISSUED:
AT INITIAL DIVIDENDS AND UPON EXCHANGE FROM ANOTHER
PURCHASE DISTRIBUTIONS SMITH BARNEY FUND
----------------------------------------------------------------------------------------------
<S> <C> <C>
Eight years In same proportion as the number On the date the shares
after the of Class B shares converting is originally acquired would
date of to total Class B shares you own have converted into Class A
purchase (excluding shares issued as shares
dividends)
</TABLE>

CLASS L SHARES

You buy Class L shares at the offering price, which is the net asset value
plus a sales charge of 1.00% (1.01% of the net amount invested). In addition,
if you redeem your Class L shares within one year of purchase, you will pay a
deferred sales charge of 1.00%. If you held Class C shares of any Smith Barney
fund on June 12, 1998, you will not pay an initial sales charge on Class L
shares of the fund you may buy before June 22, 2001.

Service Agents selling Class L shares receive a commission of up to 2.00% of
the purchase price of the Class L shares they sell. Starting in the 13th month
after purchase, Service Agents also will receive an annual fee of up to 1.00%
of the average daily net assets represented by the Class L shares that they
have sold.

CLASS Y SHARES

You buy Class Y shares at net asset value with no initial sales charge and no
deferred sales charge when you redeem. You must meet the $15,000,000 initial
investment requirement. You can use a letter of intent to meet this
requirement by buying Class Y shares of the fund over a 13-month period. To
qualify, you must initially invest $5,000,000.

--------------------------------------------------------------------------------
MORE ABOUT DEFERRED SALES CHARGES
--------------------------------------------------------------------------------

The deferred sales charge is based on the net asset value at the time of
purchase or redemption, whichever is less. Therefore, you do not pay a sales
charge on amounts representing appreciation or depreciation.

In addition, you do not pay a deferred sales charge on:

o Shares exchanged for shares of another Smith Barney fund

o Shares representing reinvested distributions and dividends

o Shares no longer subject to the deferred sales charge

Each time you place a request to redeem shares, the fund will first redeem any
shares in your account that are not subject to a deferred sales charge and
then the shares in your account that have been held the longest.

If you redeemed shares of a Smith Barney fund in the past 60 days and paid a
deferred sales charge, you may buy shares of the fund at the current net asset
value and be credited with the amount of the deferred sales charge, if you
notify your Service Agent.

The fund's distributor receives deferred sales charges as partial compensation
for its expenses in selling shares, including the payment of compensation to
your Service Agent.

DEFERRED SALES CHARGE WAIVERS

The deferred sales charge for each share class will generally be waived:

o On payments made through certain systematic withdrawal plans

o On certain distributions from a retirement plan

o For involuntary redemptions of small account balances

o For 12 months following the death or disability of a shareholder

If you want to learn about additional waivers of deferred sales charges,
contact your Service Agent or consult the SAI.

<PAGE>

BUYING SHARES

Through a Service Agent You should contact your Service Agent to open a
brokerage account and make arrangements to buy
shares.

If you do not provide the following information, your
order will be rejected:

o Class of shares being bought
o Dollar amount or number of shares being bought

Your Service Agent may charge an annual account
maintenance fee.
--------------------------------------------------------------------------------

Through the Qualified retirement plans and certain other
fund investors who are clients of certain Service Agents
are eligible to buy shares directly from the fund.

o Write to the fund at the following address:

SMITH BARNEY INTERNATIONAL LARGE CAP FUND
(SPECIFY CLASS OF SHARES)
c/o PFPC GLOBAL FUND SERVICES
P.O. BOX 9699
PROVIDENCE, RI 02940-9699

o Enclose a check to pay for the shares. For initial
purchases, complete and send an account application

o For more information, call the transfer agent at
1-800-451-2010.
--------------------------------------------------------------------------------

Through a systematic You may authorize your Service Agent or the sub-
investment plan transfer agent to transfer funds automatically from
(i) a regular bank account, (ii) cash held in a
brokerage account opened with a Service Agent or
(iii) certain money market funds, in order to buy
shares on a regular basis.

o Amounts transferred should be at least $25 monthly or
$50 quarterly
o If you do not have sufficient funds in your account
on a transfer date, your Service Agent or the
sub-transfer agent may charge you a fee

For more information, contact your Service Agent or
the transfer agent or consult the SAI.

<PAGE>

EXCHANGING SHARES

Smith Barney offers a You should contact your Service Agent to exchange
distinctive family of into other Smith Barney funds. Be sure to read the
funds tailored to help prospectus of the Smith Barney fund you are
meet the varying needs exchanging into. An exchange is a taxable
of both large and small transaction.
investors
o You may exchange shares only for shares of the same
class of another Smith Barney fund. Not all Smith
Barney funds offer all classes.

o Not all Smith Barney funds may be offered in your
state of residence. Contact your Service Agent or the
transfer agent for further information.

o You must meet the minimum investment amount for each
fund (except for systematic investment plan
exchanges).

o If you hold share certificates, the transfer agent
must receive the certificates endorsed for transfer
or with signed stock powers (documents transferring
ownership of certificates) before the exchange is
effective.

o The fund may suspend or terminate your exchange
privilege if you engage in an excessive pattern of
exchanges.
--------------------------------------------------------------------------------

Waiver of additional Your shares will not be subject to an initial sales
sales charges charge at the time of the exchange.

Your deferred sales charge (if any) will continue to
be measured from the date of your original purchase.
If the fund you exchange into has a higher deferred
sales charge, you will be subject to that charge. If
you exchange at any time into a fund with a lower
charge, the sales charge will not be reduced.
--------------------------------------------------------------------------------

By telephone If you do not have a brokerage account with a Service
Agent, you may be eligible to exchange shares through
the fund. You must complete an authorization form to
authorize telephone transfers. If eligible, you may
make telephone exchanges on any day the New York
Stock Exchange is open. Call the transfer agent at
1-800-451-2010 between 9:00 a.m. and 4:00 p.m.
(Eastern time). Requests received after the close of
regular trading on the Exchange are priced at the net
asset value next determined.

You can make telephone exchanges only between
accounts that have identical registrations.
--------------------------------------------------------------------------------

By mail If you do not have a brokerage account, contact your
Service Agent or write to the fund at the address on
the following page.

<PAGE>

--------------------------------------------------------------------------------
REDEEMING SHARES
--------------------------------------------------------------------------------

Generally Contact your Service Agent to redeem shares of the
fund.

If you hold share certificates, the sub-transfer
agent must receive the certificates endorsed for
transfer or with signed stock powers before the
exchange is effective.

If the shares are held by a fiduciary or corporation,
other documents may be required.

Your redemption proceeds will normally be sent within
three business days after your request is received in
good order, but in any event within seven days.
However, if you recently purchased your shares by
check, your redemption proceeds will not be sent to
you until your original check clears, which may take
up to 15 days.

If you have a brokerage account with a Service Agent,
your redemption proceeds will be placed in your
account and not reinvested without your specific
instruction. In other cases, unless you direct
otherwise, your redemption proceeds will be paid by
check mailed to your address of record.
--------------------------------------------------------------------------------

By mail For accounts held directly at the fund, send written
requests to the fund at the following address:
SMITH BARNEY INTERNATIONAL LARGE CAP FUND
(SPECIFY CLASS OF SHARES)
c/o PFPC GLOBAL FUND SERVICES
P.O. BOX 9699
PROVIDENCE, RI 02940-9699

Your written request must provide the following:

o The fund and account number

o The class of shares and the dollar amount or number
of shares to be redeemed

o Signatures of each owner exactly as the account is
registered
--------------------------------------------------------------------------------

<PAGE>

By telephone If you do not have a brokerage account with a Service
Agent, you may be eligible to redeem shares (except
those held in retirement plans) in amounts up to
$50,000 per day through the fund. You must complete
an authorization form to authorize telephone
redemptions. If eligible, you may request redemptions
by telephone on any day the New York Stock Exchange
is open. Call the transfer agent at 1-800-451-2010
between 9:00 a.m. and 4:00 p.m. (Eastern time).
Requests received after the close of regular trading
on the Exchange are priced at the net asset value
next determined.

Your redemption proceeds can be sent by check to your
address of record or by wire or electronic transfer
(ACH) to a bank account designated on your
authorization form. You must submit a new
authorization form to change the bank account
designated to receive wire or electronic transfers
and you may be asked to provide certain other
documents. The sub-transfer agent may charge a fee on
an electronic transfer (ACH).
--------------------------------------------------------------------------------

Automatic cash You can arrange for the automatic redemption of a
withdrawal plans portion of your shares on a monthly or quarterly
basis. To qualify you must own shares of the fund
with a value of at least $10,000 ($5,000 for
retirement plan accounts) and each automatic
redemption must be at least $50. If your shares are
subject to a deferred sales charge, the sales charge
will be waived if your automatic payments do not
exceed 1.00% per month of the value of your shares
subject to a deferred sales charge.

The following conditions apply:

o Your shares must not be represented by certificates

o All dividends and distributions must be reinvested

For more information, contact your Service Agent or
consult the SAI.

<PAGE>
--------------------------------------------------------------------------------
OTHER THINGS TO KNOW ABOUT SHARE TRANSACTIONS
--------------------------------------------------------------------------------

When you buy, exchange or redeem shares, your request must be in good order.
This means you have provided the following information, without which your
request will not be processed:

o Name of the fund

o Account number

o Class of shares being bought, exchanged or redeemed

o Dollar amount or number of shares being bought,
exchanged or redeemed

o Signature of each owner exactly as the account is
registered

The fund will try to confirm that any telephone exchange or redemption request
is genuine by recording calls, asking the caller to provide certain personal
identification information, sending you a written confirmation or requiring
other confirmation procedures from time to time.

SIGNATURE GUARANTEES To be in good order, your redemption request must
include a signature guarantee if you:

o Are redeeming over $50,000 of shares

o Are sending signed share certificates or stock powers
to the sub-transfer agent

o Instruct the sub-transfer agent to mail the check to
an address different from the one on your account

o Changed your account registration

o Want the check paid to someone other than the account
owner(s)

o Are transferring the redemption proceeds to an
account with a different registration

You can obtain a signature guarantee from most banks, dealers, brokers, credit
unions and federal savings and loan institutions, but not from a notary
public.

The fund has the right to:

o Suspend the offering of shares

o Waive or change minimum and additional investment
amounts

o Reject any purchase or exchange order

o Change, revoke or suspend the exchange privilege

o Suspend telephone transactions

o Suspend or postpone redemptions of shares on any day
when trading on the New York Stock Exchange is
restricted, or as otherwise permitted by the
Securities and Exchange Commission

o Pay redemption proceeds by giving you securities. You
may pay transaction costs to dispose of the
securities

SMALL ACCOUNT BALANCES If your account falls below $500 ($250 for IRA
accounts) because of a redemption of fund shares, the fund may ask you to
bring your account up to the applicable minimum investment amounts. If you
choose not to do so within 60 days, the fund may close your account and send
you the redemption proceeds.

EXCESSIVE EXCHANGE TRANSACTIONS The manager may determine that a pattern of
frequent exchanges is detrimental to the fund's performance and other
shareholders. If so, the fund may limit additional purchases and/or exchanges
by the shareholder.

SHARE CERTIFICATES The fund does not issue share certificates unless a
written request signed by all registered owners is made to the sub-transfer
agent. If you hold share certificates it will take longer to exchange or
redeem shares.

<PAGE>

--------------------------------------------------------------------------------
DIVIDENDS, DISTRIBUTIONS AND TAXES
--------------------------------------------------------------------------------

DIVIDENDS The fund generally pays dividends and makes capital gain
distributions, if any, once a year, typically in December. The fund may pay
additional distributions and dividends at other times if necessary for the
fund to avoid a federal tax. Capital gain distributions and dividends are
reinvested in additional fund shares of the same class you hold. The fund
expects distributions to be primarily from capital gains. You do not pay a
sales charge on reinvested distributions or dividends. Alternatively, you can
instruct your Service Agent, the transfer agent or the sub-transfer agent to
have your distributions and/or dividends paid in cash. You can change your
choice at any time to be effective as of the next distribution or dividend,
except that any change given to the transfer agent or sub-transfer agent less
than five days before the payment date will not be effective until the next
distribution or dividend is paid.

TAXES In general, redeeming shares, exchanging shares and receiving
distributions (whether in cash or additional shares) are all taxable events.

TRANSACTION FEDERAL TAX STATUS

Redemption or exchange of shares Usually capital gain or loss; long-
term only if shares owned more than
one year

Long-term capital gain distributions Long-term capital gain

Short-term capital gain distributions Ordinary income

Dividends Ordinary income

Long-term capital gain distributions are taxable to you as long-term capital
gain regardless of how long you have owned your shares. You may want to avoid
buying shares when the fund is about to declare a capital gain distribution or
a dividend, because it will be taxable to you even though it may actually be a
return of a portion of your investment.

After the end of each year, the fund will provide you with information about
the distributions and dividends you received and any redemptions of shares
during the previous year. If you do not provide the fund with your correct
taxpayer identification number and any required certifications, you may be
subject to back-up withholding of 31% of your distributions, dividends, and
redemption proceeds. Because each shareholder's circumstances are different
and special tax rules may apply, you should consult your tax adviser about
your investment in the fund.

--------------------------------------------------------------------------------
SHARE PRICE
--------------------------------------------------------------------------------

You may buy, exchange or redeem shares at their net asset value, plus any
applicable sales charge, next determined after receipt of your request in good
order. The fund's net asset value is the value of its assets minus its
liabilities. Net asset value is calculated separately for each class of
shares. The fund calculates its net asset value every day the New York Stock
Exchange is open. The Exchange is closed on certain holidays listed in the
SAI. This calculation is done when regular trading closes on the Exchange
(normally 4:00 p.m., Eastern time).

The fund generally values its fund securities based on market prices or
quotations. When reliable market prices or quotations are not readily
available, the fund may price those securities at fair value. Fair value is
determined in accordance with procedures approved by the fund's board. A fund
that uses fair value to price securities may value those securities higher or
lower than another fund using market quotations to price the same securities.

In order to buy, redeem or exchange shares at that day's price, you must place
your order with your Service Agent or the fund's sub-transfer agent before the
New York Stock Exchange closes. If the Exchange closes early, you must place
your order prior to the actual closing time. Otherwise, you will receive the
next business day's price.

Service Agents must transmit all orders to buy, exchange or redeem shares to
the fund's sub-transfer agent before the sub-transfer agent's close of
business.

<PAGE>

--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the fund's
financial performance for the fiscal periods indicated. Certain information
reflects financial results for a single Class A and Class B fund share. The
total returns in the table represent the rate that an investor would have
earned or lost on an investment in the fund (assuming investment of all
dividends and distributions). This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with the fund's financial
statements, is included in the annual report which is incorporated by
reference in the Statement of Additional Information and which is available
upon request. No information is provided for Class L or Y shares because those
classes had no outstanding shares as of December 31, 1999. The Fund was
formerly known as CitiFunds International Growth Portfolio.

<TABLE>
FOR A CLASS A OR B SHARE OF CAPITAL STOCK OUTSTANDING
THROUGHOUT EACH YEAR ENDED DECEMBER 31:

<CAPTION>
CLASS A CLASS B
----------------------------------------------------------------- -----------------
JANUARY 4, 1999
YEAR ENDED DECEMBER 31, (COMMENCEMENT
OF OPERATIONS) TO
----------------------------------------------------------------- DECEMBER 31,
1999 1998 1997 1996 1995 1999
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period $12.60 $11.42 $11.79 $13.46 $11.44 $12.87
------------------------------------------------------------------------------------------------------------------------------
Income from operations:
Net investment income (loss) (0.077) (0.009) 0.004* 0.028* 0.013* (0.095)
Net realized and unrealized
gain (loss) 4.452 1.996 0.592* 0.314* 2.055* 4.090
------------------------------------------------------------------------------------------------------------------------------
Total from operations 4.375 1.987 0.596 0.342 2.068 3.995
------------------------------------------------------------------------------------------------------------------------------
Less distributions from:
Net investment income -- (0.008) (0.025) (0.021) (0.048) --
In excess of net investment
income -- (0.001) -- -- -- --
Net realized gain on
investments (1.055) (0.798) (0.941) (1.991) -- (1.055)
------------------------------------------------------------------------------------------------------------------------------
Total from distributions (1.055) (0.807) (0.966) (2.012) (0.048) (1.055)
------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $15.92 $12.60 $11.42 $11.79 $13.46 $15.81
------------------------------------------------------------------------------------------------------------------------------
Total return 35.66% 17.62% 5.15% 2.59% 18.08% 31.95%++
------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>

<PAGE>

FOR A CLASS A OR B SHARE OF CAPITAL STOCK OUTSTANDING
THROUGHOUT EACH YEAR ENDED DECEMBER 31:

Net investment income (loss) per
share $(0.210) $(0.011) $(0.004)* $(0.002)* $0.013* $(0.108)
Ratios:
Expenses to average net assets (A) 1.90% 1.80% 1.82% 1.94% 1.75% 2.70%+
Net investment income (loss) to
average net assets (0.64)% (0.22)% (0.04)% (0.01)% 0.10% (1.44)%+
------------------------------------------------------------------------------------------------------------------------------
* The per share amounts were computed using a monthly average number of shares outstanding during the period.
(A) Includes the fund's share of International Equity Portfolio allocated expenses.
(B) The portfolio turnover rates represent the rate of portfolio activity of
International Equity Portfolio, the underlying portfolio through which the fund
invests.
+ Annualized.
++ Not annualized.
</TABLE>

<PAGE>

[Logo] Smith Barney
Mutual Funds
Your Serious Money. Professionally Managed.(SM)

INTERNATIONAL
LARGE CAP FUND

SHAREHOLDER REPORTS Annual and semiannual reports to shareholders provide
additional information about the fund's investments. These reports discuss the
market conditions and investment strategies that significantly affected the
fund's performance.

STATEMENT OF ADDITIONAL INFORMATION
The statement of additional information provides more detailed information
about the fund and is incorporated by reference into (is legally part of) this
prospectus.

You can make inquiries about the fund or obtain shareholder reports or the
statement of additional information (without charge) by contacting your Service
Agent, by calling the fund at 1-800-451-2010, or by writing to the fund at Smith
Barney Mutual Funds, 388 Greenwich Street, MF2, New York, New York 10013.

Information about the fund (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's Public Reference Room in Washington,
D.C. In addition, information on the operation of the Public Reference Room
may be obtained by calling the Commission at 1-202-942-8090. Reports and other
information about the fund are available on the EDGAR Database on the
Commission's Internet site at http://www.sec.gov Copies of this information
may be obtained for a duplicating fee by electronic request at the following
E-mail address: [email protected], or by writing the Commission's Public
Reference Section, Washington, D.C. 20549-0102.

If someone makes a statement about the fund that is not in this prospectus,
you should not rely upon that information. Neither the fund nor the
distributor is offering to sell shares of the fund to any person to whom the
fund may not lawfully sell its shares.

(Investment Company Act file no. 811-6154)
FD02004 9/00
<PAGE>
Filing made under Rule 497(c)
File Nos. 33-36556 and 811-6154

Statement of
Additional Information
September 11, 2000

SMITH BARNEY(SM) INTERNATIONAL LARGE CAP FUND

Smith Barney(SM) International Large Cap Fund (the "fund") is a series of
CitiFunds(SM) International Trust (the "trust"). The address and telephone
number of the trust are 338 Greenwich Street, New York, New York 10013, (800)
451-2010. The trust invests all of the investable assets of the fund in
International Equity Portfolio (the "portfolio"), which is a series of The
Premium Portfolios, a trust organized under the laws of the State of New York
(the "portfolio trust"). The address of the portfolio trust is Elizabethan
Square, George Town, Grand Cayman, British West Indies.

FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, CITIBANK, N.A. OR ANY OF ITS AFFILIATES, ARE NOT INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY, AND INVOLVE
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED.

TABLE OF CONTENTS PAGE

1. The Trust ........................................................... 2
2. Investment Objective and Policies; Special Information Concerning
Investment Structure ................................................ 2
3. Description of Permitted Investments and Investment Practices ....... 3
4. Investment Restrictions ............................................. 10
5. Performance Information ............................................. 11
6. Determination of Net Asset Value; Valuation of Securities ........... 13
7. Additional Information on the Purchase and Sale of Fund Shares and
Shareholder Programs ................................................ 14
8. Management .......................................................... 24
9. Portfolio Transactions .............................................. 32
10. Description of Shares, Voting Rights and Liabilities ................ 33
11. Tax Matters ......................................................... 35
12. Financial Statements ................................................ 37

This Statement of Additional Information sets forth information which may be
of interest to investors but which is not necessarily included in the fund's
Prospectus, dated September 11, 2000, by which shares of the fund are offered.
This Statement of Additional Information should be read in conjunction with the
Prospectus. This Statement of Additional Information incorporates by reference
the financial statements described on page 37 hereof. These financial statements
can be found in the fund's Annual Report to Shareholders. An investor may obtain
copies of the fund's Prospectus and Annual Report without charge by calling
toll-free 1-800-451-2010.

THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS AUTHORIZED
FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS.

<PAGE>

1. THE TRUST

CitiFunds International Trust is an open-end management investment company
that was organized as a business trust under the laws of the Commonwealth of
Massachusetts on August 7, 1990. The trust was called Landmark International
Equity Fund until its name was changed to Landmark International Funds effective
May 5, 1995. Effective January 7, 1998, the trust's name was changed to
CitiFunds International Trust. This Statement of Additional Information
describes Smith Barney International Large Cap Fund (the "fund"), which is a
series of the trust. Prior to September 11, 2000 the fund was called CitiFunds
International Growth Portfolio; prior to October 5, 1998, the fund was called
CitiFunds International Equity Portfolio; and prior to March 2, 1998 the fund
was called Landmark International Equity Fund. References in this Statement of
Additional Information to the "Prospectus" of the fund are to the Prospectus,
dated September 11, 2000.

The fund is a diversified fund. The fund is permitted to seek its investment
objectives by investing all or a portion of its assets in one or more investment
companies to the extent not prohibited by the Investment Company Act of 1940, as
amended (the "1940 Act"), the rules and regulations thereunder, and exemptive
orders granted under the 1940 Act. Currently, the fund invests all of its
investable assets in International Equity Portfolio (the "portfolio"). The
portfolio is a series of The Premium Portfolios (the "portfolio trust") and is
an open-end, diversified management investment company. The portfolio has the
same investment objectives and policies as the fund.

Under the 1940 Act, a diversified management investment company must invest
at least 75% of its assets in cash and cash items, U.S. Government securities,
investment company securities and other securities limited as to any one issuer
to not more than 5% of the total assets of the investment company and not more
than 10% of the voting securities of the issuer.

Because the fund invests through the portfolio, all references in this
Statement of Additional Information to the fund include the portfolio and to the
trust include the portfolio trust, except as otherwise noted or, unless the
context otherwise requires.

Citibank, N.A. ("Citibank" or the "adviser") is investment adviser to the
portfolio. The adviser manages the investments of the portfolio from day to day
in accordance with the portfolio's investment objectives and policies. The
selection of investments for the portfolio and the way it is managed depend on
the conditions and trends in the economy and the financial marketplaces.

Citibank the administrator of the fund and the portfolio (the
"administrator"), supervises the overall administration of the fund and the
portfolio. The boards of trustees of the trust and the portfolio trust provide
broad supervision over the affairs of the fund and the portfolio, respectively.
Shares of the fund are continuously sold by Salomon Smith Barney Inc., the
fund's distributor (the "distributor"), only to investors who are customers of
certain broker-dealers, financial intermediaries, financial institutions or the
distributor's financial consultants (each called a "service agent") that has
entered into a sales or service agreement with the distributor concerning the
fund.

2. INVESTMENT OBJECTIVE AND POLICIES;
SPECIAL INFORMATION CONCERNING INVESTMENT STRUCTURE

The investment objective of the fund is to promote long-term capital growth.
Dividend income, if any, is incidental to this investment objective.

The investment objective of the fund may be changed without approval by the
fund's shareholders, but shareholders will be given written notice at least 30
days before any change is implemented. Of course, there can be no assurance that
the fund will achieve its investment objective.

As noted above, the fund does not invest directly in securities, but instead
invests all of its investable assets in the portfolio, which has the same
investment objective and policies as the fund. The portfolio, in turn, buys,
holds and sells securities in accordance with this objective and these policies.
Of course, there can be no assurance that the fund or the portfolio will achieve
its objective. The trustees of the fund believe that the aggregate per share
expenses of the fund and the portfolio will be less than or approximately equal
to the expenses that the fund would incur if the assets of the fund were
invested directly in the types of securities held by the portfolio.

The trust may withdraw the investment of the fund from the portfolio at any
time if the board of trustees of the trust determines that it is in the best
interests of the fund to do so. Upon any such withdrawal, the fund's assets
would continue to be invested in accordance with its investment objective and
policies, either directly in securities or in another mutual fund or pooled
investment vehicle having the same investment objective and policies. If the
fund were to withdraw, the fund could receive securities from the portfolio
instead of cash, causing the fund to incur brokerage, tax and other charges or
leaving it with securities which may or may not be readily marketable or widely
diversified.

The portfolio may change its investment objective and certain of its
investment policies and restrictions without approval by its investors, but the
portfolio will notify the fund (which in turn will notify its shareholders) and
its other investors at least 30 days before implementing any change in its
investment objective. A change in investment objective, policies or restrictions
may cause the fund to withdraw its investment in the portfolio.

Certain investment restrictions of the portfolio described below under
"Investment Restrictions" are fundamental and cannot be changed without approval
by the investors in the portfolio. When the fund is asked to vote on certain
matters concerning the portfolio, the fund will either hold a shareholder
meeting and vote in accordance with shareholder instructions or otherwise vote
in accordance with applicable rules and regulations. Of course, the fund could
be outvoted, or otherwise adversely affected by other investors in the
portfolio.

The portfolio may sell interests to investors in addition to the fund. These
investors may be mutual funds which offer shares to their shareholders with
different costs and expenses than the fund. Therefore, the investment return for
all investors in funds investing in the portfolio may not be the same. These
differences in returns are also present in other mutual fund structures.
Information about other holders of interests in the portfolio is available from
the fund's distributor.

3. DESCRIPTION OF PERMITTED INVESTMENTS
AND INVESTMENT PRACTICES

The fund may, but need not, invest in all of the investments and utilize all
of the investment techniques described below and in the Prospectus. The
selection of investments and the utilization of investment techniques depend on,
among other things, the adviser's investment strategies for the fund, conditions
and trends in the economy and financial markets and investments being available
on terms that, in the adviser's opinion, make economic sense.

The Prospectus contains a discussion of the principal investment strategies
of the fund and the principal risks of investing in the fund. The following
supplements the information contained in the Prospectus concerning the
investment policies and techniques of the fund. The policies described herein
are not fundamental and may be changed without shareholder approval.

As a non-fundamental policy, at least 65% of the value of the fund's total
assets will be invested in equity securities of issuers organized in at least
three countries other than the United States. While the fund's policy is to
invest primarily in common stocks of companies organized outside the United
States ("non-U.S. issuers") believed to possess better than average prospects
for growth, appreciation may be sought in other types of securities, principally
of non-U.S. issuers, such as fixed income securities, convertible and
non-convertible bonds, preferred stocks and warrants, when relative values make
such purchases appear attractive either as individual issues or as types of
securities in certain economic environments. There is no formula as to the
percentage of assets that may be invested in any one type of security.

REPURCHASE AGREEMENTS

The fund may invest in repurchase agreements collateralized by securities in
which the fund may otherwise invest. Repurchase agreements are agreements by
which the fund purchases a security and simultaneously commits to resell that
security to the seller (which is usually a member bank of the U.S. Federal
Reserve System or a member firm of the New York Stock Exchange (or a subsidiary
thereof)) at an agreed-upon date within a number of days (frequently overnight
and usually not more than seven days) from the date of purchase. The resale
price reflects the purchase price plus an agreed-upon market rate of interest
which is unrelated to the coupon rate or maturity of the purchased security. A
repurchase agreement involves the obligation of the seller to pay the agreed
upon price, which obligation is in effect secured by the value of the underlying
security, usually U.S. Government or Government agency issues. Under the 1940
Act, repurchase agreements may be considered to be loans by the buyer. The
fund's risk is limited to the ability of the seller to pay the agreed-upon
amount on the delivery date. If the seller defaults, the underlying security
constitutes collateral for the seller's obligation to pay although the fund may
incur certain costs in liquidating this collateral and in certain cases may not
be permitted to liquidate this collateral. All repurchase agreements entered
into by the fund are fully collateralized, with such collateral being marked to
market daily.

REVERSE REPURCHASE AGREEMENTS

The fund may enter into reverse repurchase agreements, subject to the fund's
investment restriction on borrowing. Reverse repurchase agreements involve the
sale of securities held by the fund and the agreement by the fund to repurchase
the securities at an agreed-upon price, date and interest payment. When the fund
enters into reverse repurchase transactions, securities of a dollar amount equal
in value to the securities subject to the agreement will be segregated. The
segregation of assets could impair the fund's ability to meet its current
obligations or impede investment management if a large portion of the fund's
assets are involved. Reverse repurchase agreements are considered to be a form
of borrowing by the fund. In the event of the bankruptcy of the other party to a
reverse repurchase agreement, the fund could experience delays in recovering the
securities sold. To the extent that, in the meantime, the value of the
securities sold has changed, the fund could experience a loss.

RULE 144A SECURITIES

Consistent with applicable investment restrictions, the fund may purchase
securities that are not registered under the Securities Act of 1933 (the
"Securities Act"), but can be offered and sold to "qualified institutional
buyers" under Rule 144A under the Securities Act ("Rule 144A securities").
However, the fund will not invest more than 15% of its net assets (taken at
market value) in illiquid investments, which include securities for which there
is no readily available market, securities subject to contractual restrictions
on resale and Rule 144A securities, unless, in the case of Rule 144A securities,
the board of trustees determines, based on the trading markets for the specific
Rule 144A security, that it is liquid. The trustees have adopted guidelines and,
subject to oversight by the trustees, have delegated to the Adviser the daily
function of determining and monitoring liquidity of Rule 144A securities. The
trustees, however, retain oversight and are ultimately responsible for the
determinations.

PRIVATE PLACEMENTS AND ILLIQUID INVESTMENTS

The fund may invest up to 15% of its net assets in securities for which
there is no readily available market. These illiquid securities may include
privately placed restricted securities for which no institutional market exists.
The absence of a trading market can make it difficult to ascertain a market
value for illiquid investments. Disposing of illiquid investments may involve
time-consuming negotiation and legal expenses, and it may be difficult or
impossible for the fund to sell them promptly at an acceptable price.

CONVERTIBLE SECURITIES

The fund may invest in convertible securities. A convertible security is a
fixed-income security (a bond or preferred stock) which may be converted at a
stated price within a specified period of time into a certain quantity of common
stock or other equity securities of the same or a different issuer. Convertible
securities rank senior to common stock in a corporation's capital structure but
are usually subordinated to similar non-convertible securities. While providing
a fixed-income stream (generally higher in yield than the income derivable from
common stock but lower than that afforded by a similar non-convertible
security), a convertible security also affords an investor the opportunity,
through its conversion feature, to participate in the capital appreciation
attendant upon a market price advance in the convertible security's underlying
common stock.

In general, the market value of a convertible security is at least the
higher of its "investment value" (i.e., its value as a fixed-income security) or
its "conversion value" (i.e., its value upon conversion into its underlying
stock). As a fixed-income security, a convertible security tends to increase in
market value when interest rates decline and tends to decrease in value when
interest rates rise. However, the price of a convertible security is also
influenced by the market value of the security's underlying common stock. The
price of a convertible security tends to increase as the market value of the
underlying stock rises, whereas it tends to decrease as the market value of the
underlying stock declines. While no securities investment is without some risk,
investments in convertible securities generally entail less risk than
investments in the common stock of the same issuer.

SECURITIES OF NON-U.S. ISSUERS

The fund invests in securities of non-U.S. issuers. Investing in securities
of foreign issuers may involve significant risks not present in domestic
investments. For example, the value of such securities fluctuates based on the
relative strength of the U.S. dollar. In addition, there is generally less
publicly available information about foreign issuers, particularly those not
subject to the disclosure and reporting requirements of the U.S. securities
laws. Non-U.S. issuers are generally not bound by uniform accounting, auditing
and financial reporting requirements comparable to those applicable to domestic
issuers. Investments in securities of non-U.S. issuers also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitations on the removal of funds or
other assets of the fund, political or financial instability or diplomatic and
other developments which would affect such investments. Further, economies of
other countries or areas of the world may differ favorably or unfavorably from
the economy of the U.S.

It is anticipated that in most cases the best available market for
securities of non-U.S. issuers would be on exchanges or in over-the-counter
markets located outside the U.S. Non-U.S. securities markets, while growing in
volume and sophistication, are generally not as developed as those in the
U.S., and securities of some non-U.S. issuers (particularly those located in
developing countries) may be less liquid and more volatile than securities of
comparable U.S. companies. Prices at which the fund may acquire securities may
be affected by trading by persons with material non-public information and by
securities transactions by brokers in anticipation of transactions by the
fund. Non-U.S. security trading practices, including those involving
securities settlement where the fund's assets may be released prior to receipt
of payments, may expose the fund to increased risk in the event of a failed
trade or the insolvency of a non-U.S. broker-dealer. In addition, foreign
brokerage commissions are generally higher than commissions on securities
traded in the U.S. and may be non-negotiable. In general, there is less
overall governmental supervision and regulation of non-U.S. securities
exchanges, brokers and listed companies than in the U.S.

The fund may invest in issuers located in developing countries, which are
generally defined as countries in the initial stages of their industrialization
cycles with lower per capita income. All of the risks of investing in non-U.S.
securities are heightened by investing in issuers in developing countries.
Shareholders should be aware that investing in the equity and fixed income
markets of developing countries involves exposure to economic structures that
are generally less diverse and mature, and to political systems which can be
expected to have less stability, than those of developed countries. Historical
experience indicates that the markets of developing countries have been more
volatile than the markets of developed countries with more mature economies;
such markets often have provided higher rates of return, and greater risks, to
investors. These heightened risks include (i) greater risks of expropriation,
confiscatory taxation and nationalization, and less social, political and
economic stability; (ii) the small current size of markets for securities of
issuers based in developing countries and the currently low or non-existent
volume of trading, resulting in a lack of liquidity and in price volatility;
(iii) certain national policies which may restrict the fund's investment
opportunities including restrictions on investing in issuers or industries
deemed sensitive to relevant national interests; and (iv) the absence of
developed legal structures. Such characteristics can be expected to continue in
the future.

The costs attributable to non-U.S. investing, such as the costs of
maintaining custody of securities in non-U.S. countries, frequently are higher
than those involved in U.S. investing. As a result, the operating expense
ratio of the fund may be higher than that of investment companies investing
exclusively in U.S. securities.

Subject to applicable statutory and regulatory limitations, assets of the
fund may be invested in shares of other investment companies. The fund may
invest up to 5% of its assets in closed-end investment companies which primarily
hold securities of non-U.S. issuers. Investments in closed-end investment
companies which primarily hold securities of non-U.S. issuers may entail the
risk that the market value of such investments may be substantially less than
their net asset value and that there would be duplication of investment
management and other fees and expenses.

American Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs"), Global Depositary Receipts ("GDRs") and other forms of depositary
receipts for securities of non-U.S. issuers provide an alternative method for
the fund to make non-U.S. investments. These securities are not usually
denominated in the same currency as the securities into which they may be
converted. Generally, ADRs, in registered form, are designed for use in U.S.
securities markets and EDRs and GDRs, in bearer form, are designed for use in
European and global securities markets. ADRs are receipts typically issued by a
U.S. bank or trust company evidencing ownership of the underlying securities.
EDRs and GDRs are European and global receipts, respectively, evidencing a
similar arrangement. ADRs, EDRs and GDRs are subject to many of the same risks
that apply to other investments in non-U.S. securities.

ADRs, EDRs, and GDRs may be issued pursuant to sponsored or unsponsored
programs. In sponsored programs, an issuer has made arrangements to have its
securities traded in the form of depositary receipts. In unsponsored programs,
the issuer may not be directly involved in the creation of the program. Although
regulatory requirements with respect to sponsored and unsponsored programs are
generally similar, in some cases it may be easier to obtain financial
information from an issuer that has participated in the creation of a sponsored
program. Accordingly, there may be less information available regarding issuers
of securities underlying unsponsored programs and there may not be a correlation
between such information and the market value of the depositary receipts.

The fund may invest in securities of non-U.S. issuers that impose
restrictions on transfer within the U.S. or to U.S. persons. Although
securities subject to such transfer restrictions may be marketable abroad,
they may be less liquid than securities of non-U.S. issuers of the same class
that are not subject to such restrictions.

EURO CONVERSION

The fund may invest in securities of issuers in European countries. Certain
European countries have joined the European Economic and Monetary Union (EMU).
Each EMU participant's currency began a conversion into a single European
currency, called the euro, on January 1, 1999, to be completed by July 1, 2002.
The consequences of the euro conversion for foreign exchange rates, interest
rates and the value of European securities held by the fund are presently
unclear. European financial markets, and therefore, the fund, could be adversely
affected if the euro conversion does not continue as planned or if a
participating country chooses to withdraw from the EMU. The fund could also be
adversely affected if the computing, accounting and trading systems used by its
service providers are not capable of processing transactions related to the
euro. These issues may negatively affect the operations of the companies in
which the fund invests as well.

FOREIGN CURRENCY EXCHANGE TRANSACTIONS

Because the fund may buy and sell securities denominated in currencies other
than the U.S. dollar, and receive interest, dividends and sale proceeds in
currencies other than the U.S. dollar, the fund may enter into currency exchange
transactions to convert U.S. currency to foreign currency and foreign currency
to U.S. currency, as well as convert foreign currency to other foreign
currencies. The fund either enters into these transactions on a spot (i.e.,
cash) basis at the spot rate prevailing in the foreign currency exchange market,
or uses forward contracts to purchase or sell foreign currencies. The fund also
may, but is not obligated to, enter into foreign currency hedging transactions
in an attempt to protect the value of the assets of the fund as measured in U.S.
dollars from unfavorable changes in currency exchange rates and control
regulations. (Although the fund's assets are valued daily in terms of U.S.
dollars, the trust does not intend to convert the fund's holdings of other
currencies into U.S. dollars on a daily basis.) The fund does not currently
intend to speculate in currency exchange rates or forward contracts.

The fund may convert currency on a spot basis from time to time, and
investors should be aware of the costs of currency conversion. Although currency
exchange dealers do not charge a fee for conversion, they do realize a profit
based on the difference (the "spread") between the prices at which they are
buying and selling various currencies. Thus, a dealer may offer to sell a
currency at one rate, while offering a lesser rate of exchange should the fund
desire to resell that currency to the dealer.

A forward contract involves an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days from the date
of the contract, agreed upon by the parties, at a price set at the time of the
contract. These contracts are traded in the interbank market conducted directly
between currency traders (usually large commercial banks) and their customers.
Because these contracts are traded in the interbank market and not on organized
commodities or securities exchanges, these contracts operate in a manner
distinct from exchange-traded instruments, and their use involves certain risks.
A forward contract generally has no deposit requirement, and no fees or
commissions are charged at any stage for trades.

When the fund enters into a contract for the purchase or sale of a
security denominated in a non-U.S. currency, it may desire to "lock in" the
U.S. dollar price of the security. By entering into a forward contract for the
purchase or sale, for a fixed amount of U.S. dollars, of the amount of non-
U.S. currency involved in the underlying security transaction, the fund may be
able to protect against a possible loss resulting from an adverse change in
the relationship between the U.S. dollar and the non-U.S. currency during the
period between the date the security is purchased or sold and the date on
which payment is made or received.

When the Adviser believes that the currency of a particular country may
suffer a substantial decline against the U.S. dollar, the fund may enter into a
forward contract to sell, for a fixed amount of U.S. dollars, the amount of
non-U.S. currency approximating the value of some or all of the fund's
securities denominated in such non-U.S. currency. The projection of a short-term
hedging strategy is highly uncertain. Under normal circumstances, consideration
of the prospect for currency parities will be incorporated in the investment
decisions made with regard to overall diversification strategies. However, the
fund believes that it is important to have the flexibility to enter into such
forward contracts when it determines that its best interests will be served.

The fund generally would not enter into a forward contract with a term
greater than one year. At the maturity of a forward contract, the fund will
either sell the security and make delivery of the non-U.S. currency, or retain
the security and terminate its contractual obligation to deliver the non-U.S.
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
non-U.S. currency. If the fund retains the security and engages in an offsetting
transaction, the fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If the fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to sell the non-U.S. currency. Should forward prices decline
during the period between the date the fund enters into a forward contract for
the sale of the non-U.S. currency and the date it enters into an offsetting
contract for the purchase of such currency, the portfolio will realize a gain to
the extent the selling price of the currency exceeds the purchase price of the
currency. Should forward prices increase, the fund will suffer a loss to the
extent that the purchase price of the currency exceeds the selling price of the
currency.

It is impossible to forecast with precision the market value of fund
securities at the expiration of the contract. Accordingly, it may be necessary
for the fund to purchase additional non-U.S. currency on the spot market if the
market value of the security is less than the amount of non-U.S. currency the
fund is obligated to deliver and if a decision is made to sell the security and
make delivery of such currency. Conversely, it may be necessary to sell on the
spot market some of the non-U.S. currency received upon the sale of the security
if its market value exceeds the amount of such currency the fund is obligated to
deliver.

The fund has established procedures consistent with policies of the
Securities and Exchange Commission (the "SEC") concerning forward contracts.
Those policies currently require that an amount of the fund's assets equal to
the amount of the purchase be held aside or segregated to be used to pay for the
commitment or that the fund otherwise covers its position in accordance with
applicable regulations and policies.

The fund may also purchase put options on a non-U.S. currency in order to
protect against currency rate fluctuations. If the fund purchases a put option
on a non-U.S. currency and the value of the non-U.S. currency declines, the
fund will have the right to sell the non-U.S. currency for a fixed amount in
U.S. dollars and will thereby offset, in whole or in part, the adverse effect
on the fund which otherwise would have resulted. Conversely, where a rise in
the U.S. dollar value of another currency is projected, and where the fund
anticipates investing in securities traded in such currency, the fund may
purchase call options on the non-U.S. currency.

The purchase of such options could offset, at least partially, the effects
of adverse movements in exchange rates. However, the benefit to the fund from
purchases of foreign currency options will be reduced by the amount of the
premium and related transaction costs. In addition, where currency exchange
rates do not move in the direction or to the extent anticipated, the fund could
sustain losses on transactions in foreign currency options which would require
it to forego a portion or all of the benefits of advantageous changes in such
rates.

The fund may write options on non-U.S. currencies for hedging purposes or
otherwise to achieve its investment objective. For example, where the fund
anticipates a decline in the value of the U.S. dollar value of a foreign
security due to adverse fluctuations in exchange rates it could, instead of
purchasing a put option, write a call option on the relevant currency. If the
expected decline occurs, the option will most likely not be exercised, and the
diminution in value of the security held by the fund may be offset by the amount
of the premium received.

Similarly, instead of purchasing a call option to hedge against an
anticipated increase in the cost of a foreign security to be acquired because of
an increase in the U.S. dollar value of the currency in which the underlying
security is primarily traded, the fund could write a put option on the relevant
currency which, if rates move in the manner projected, will expire unexercised
and allow the fund to hedge such increased cost up to the amount of the premium.

The writing of put or call options on non-U.S. currencies by the fund will
constitute only a partial hedge up to the amount of the premium, and only if
rates move in the expected direction. If this does not occur, the option may be
exercised and the fund would be required to purchase or sell the underlying
currency at a loss which may not be offset by the amount of the premium. Through
the writing of options on currencies, the fund also may be required to forego
all or a portion of the benefits which might otherwise have been obtained from
favorable movements in exchange rates.

Put and call options on non-U.S. currencies written by the fund will be
covered by segregation of cash and liquid securities in an amount sufficient to
discharge the fund's obligations with respect to the option, by acquisition of
the non-U.S. currency or of a right to acquire such currency (in the case of a
call option) or the acquisition of a right to dispose of the currency (in the
case of a put option), or in such other manner as may be in accordance with the
requirements of any exchange on which, or the counterparty with which, the
option is traded and applicable laws and regulations.

Investing in ADRs and other depositary receipts presents many of the same
risks regarding currency exchange rates as investing directly in securities
denominated in currencies other than the U.S. dollar. Because the securities
underlying these receipts are traded primarily in non-U.S. currencies, changes
in currency exchange rates will affect the value of these receipts. For example,
a decline in the U.S. dollar value of another currency in which securities are
primarily traded will reduce the U.S. dollar value of such securities, even if
their value in the other non-U.S. currency remains constant, and thus will
reduce the value of the receipts covering such securities. The fund may employ
any of the above described foreign currency hedging techniques to protect the
value of its assets invested in depositary receipts.

Of course, the fund is not required to enter into the transactions described
above and does not do so unless deemed appropriate by the Adviser. It should be
realized that under certain circumstances, hedging arrangements to protect the
value of the fund's securities against a decline in currency values may not be
available to the fund on terms that make economic sense (they may be too
costly). It should also be realized that these methods of protecting the value
of the fund's securities against a decline in the value of a currency do not
eliminate fluctuations in the underlying prices of the securities. Additionally,
although such contracts, if correctly used, may minimize the risk of loss due to
a decline in the value of the hedged currency, they do not eliminate the risk of
loss and also tend to limit any potential gain which might result should the
value of such currency increase.

SHORT SALES "AGAINST THE BOX"

In a short sale, the fund sells a borrowed security and has a corresponding
obligation to the lender to return the identical security. The fund, in
accordance with applicable investment restrictions, may engage in short sales
only if at the time of the short sale it owns or has the right to obtain, at no
additional cost, an equal amount of the security being sold short. This
investment technique is known as a short sale "against the box."

In a short sale, the seller does not immediately deliver the securities sold
and is said to have a short position in those securities until delivery occurs.
If the fund engages in a short sale, the collateral for the short position is
maintained for the fund by the custodian or qualified sub-custodian. While the
short sale is open, an amount of securities equal in kind and amount to the
securities sold short or securities convertible into or exchangeable for such
equivalent securities is maintained in a segregated account for the fund. These
securities constitute the fund's long position.

The fund does not engage in short sales against the box for investment
purposes. The fund may, however, make a short sale against the box as a hedge,
when it believes that the price of a security may decline, causing a decline in
the value of a security owned by the fund (or a security convertible or
exchangeable for such security). In such case, any future losses in the fund's
long position should be reduced by a gain in the short position. Conversely, any
gain in the long position should be reduced by a loss in the short position. The
extent to which such gains or losses are reduced depends upon the amount of the
security sold short relative to the amount the fund owns. There are certain
additional transaction costs associated with short sales against the box, but
the fund endeavors to offset these costs with the income from the investment of
the cash proceeds of short sales.

The Adviser does not expect that more than 40% of the fund's total assets
would be involved in short sales against the box. The Adviser does not currently
intend to engage in such sales.

LENDING OF SECURITIES

Consistent with applicable regulatory requirements and in order to generate
income, the fund may lend its securities to broker-dealers and other
institutional borrowers. Such loans will usually be made only to member banks of
the U.S. Federal Reserve System and to member firms of the New York Stock
Exchange (and subsidiaries thereof). Loans of securities would be secured
continuously by collateral in cash, cash equivalents, or U.S. Treasury
obligations maintained on a current basis at an amount at least equal to the
market value of the securities loaned. The cash collateral would be invested in
high quality short-term instruments. Either party has the right to terminate a
loan at any time on customary industry settlement notice (which will not usually
exceed three business days). During the existence of a loan, the fund would
continue to receive the equivalent of the interest or dividends paid by the
issuer on the securities loaned and with respect to cash collateral would also
receive compensation based on investment of cash collateral (subject to a rebate
payable to the borrower). Where the borrower provides the fund with collateral
consisting of U.S. Treasury obligations, the borrower is also obligated to pay
the fund a fee for use of the borrowed securities. The fund would not, however,
have the right to vote any securities having voting rights during the existence
of the loan, but would call the loan in anticipation of an important vote to be
taken among holders of the securities or of the giving or withholding of their
consent on a material matter affecting the investment. As with other extensions
of credit, there are risks of delay in recovery or even loss of rights in the
collateral should the borrower fail financially. However, the loans would be
made only to entities deemed by the Adviser to be of good standing. In addition,
the fund could suffer loss if the borrower terminates the loan and the fund is
forced to liquidate investments in order to return the cash collateral to the
buyer. The Adviser will make loans only when, in the judgment of the Adviser,
the considerations which can be earned currently from loans of this type
justifies the attendant risk. If the Adviser determines to make loans, it is not
intended that the value of the securities loaned would exceed 33 1/3% of the
market value of the fund's total net assets.

WHEN-ISSUED SECURITIES

The fund may purchase securities on a "when-issued" or on a "forward
delivery" basis, meaning that delivery of the securities occurs beyond normal
settlement times. In general, the fund does not pay for the securities until
received and does not start earning interest until the contractual settlement
date. It is expected that, under normal circumstances, the fund would take
delivery of such securities but the fund may sell them before the settlement
date. When the fund commits to purchase a security on a "when-issued" or on a
"forward delivery" basis, it sets up procedures consistent with SEC policies.
Since those policies currently require that an amount of the fund's assets equal
to the amount of the purchase be held aside or segregated to be used to pay for
the commitment, the fund expects always to have cash or liquid securities
sufficient to cover any commitments or to limit any potential risk. However,
even though the fund does not intend to make such purchases for speculative
purposes and intends to adhere to the provisions of SEC policies, purchases of
securities on such bases may involve more risk than other types of purchases.
The when-issued securities are subject to market fluctuation, and no interest
accrues on the security to the purchaser during this period. The payment
obligation and the interest rate that will be received on the securities are
each fixed at the time the purchaser enters into the commitment. Purchasing
obligations on a when-issued basis is a form of leveraging and can involve a
risk that the yields available in the market when the delivery takes place may
actually be higher than those obtained in the transactions itself. In that case,
there could be an unrealized loss at the time of delivery. An increase in the
percentage of the fund's assets committed to the purchase of securities on a
"when-issued basis" may increase the volatility of its net asset value.

DEFENSIVE STRATEGIES

During periods of unusual economic or market conditions or for temporary
defensive purposes or liquidity, the fund may invest without limit in cash and
in U.S. dollar-denominated high quality money market and short-term instruments.
These investments may result in a lower yield than would be available from
investments in a lower quality or longer term.

4. INVESTMENT RESTRICTIONS

The trust, on behalf of the fund, and the portfolio trust, on behalf of the
portfolio, each have adopted the following policies which may not be changed
with respect to the fund or the portfolio, as the case may be, without approval
by holders of a majority of the outstanding voting securities of the fund or the
portfolio, which as used in this Statement of Additional Information means the
vote of the lesser of (i) 67% or more of the outstanding voting securities of
the fund or portfolio present at a meeting at which the holders of more than 50%
of the outstanding voting securities of the fund or portfolio are present or
represented by proxy, or (ii) more than 50% of the outstanding voting securities
of the fund or portfolio. The term "voting securities" as used in this paragraph
has the same meaning as in the 1940 Act.

Neither the portfolio nor the fund may:

(1) Borrow money, except that as a temporary measure for extraordinary
or emergency purposes it may borrow from banks in an amount not to exceed 13
of the current value of its respective net assets, including the amount
borrowed (and neither the portfolio nor the fund may purchase any securities
at any time at which borrowings exceed 5% of the total assets of the
portfolio or the fund, taken at market value). It is intended that the fund
or portfolio would borrow money only from banks and only to accommodate
requests for the repurchase of shares of the fund or beneficial interests in
the portfolio while effecting an orderly liquidation of portfolio
securities.

(2) Purchase any security or evidence of interest therein on margin,
except that the portfolio may obtain such short term credit as may be
necessary for the clearance of purchases and sales of securities.

(3) Underwrite securities issued by other persons, except that all the
assets of the fund may be invested in another registered investment company
having the same investment objectives and policies and substantially the
same investment restrictions as those with respect to the fund (a
"qualifying portfolio") and except insofar as the portfolio may technically
be deemed an underwriter under the Securities Act in selling a security.

(4) Make loans to other persons except (a) through the lending of its
portfolio securities, but not in excess of 33 1/3% of the fund's or
portfolio's net assets, (b) through the use of fixed time deposits or
repurchase agreements or the purchase of short-term obligations or (c) by
purchasing all or a portion of an issue of debt securities of types commonly
distributed privately to financial institutions; for purposes of this
paragraph 4 the purchase of short-term commercial paper or a portion of an
issue of debt securities which are part of an issue to the public shall not
be considered the making of a loan.

(5) Purchase or sell real estate (including limited partnership
interests but excluding securities secured by real estate or interests
therein), interests in oil, gas or mineral leases, commodities or commodity
contracts in the ordinary course of business (the foregoing shall not be
deemed to preclude the fund or portfolio from investing in futures
contracts, and the fund and portfolio reserve the freedom of action to hold
and to sell real estate acquired as a result of the ownership of securities
by the fund and the portfolio).

(6) With respect to 75% of the fund's or portfolio's total assets,
purchase securities of any issuer if such purchase at the time thereof would
cause more than 5% of the fund's or the portfolio's assets (taken at market
value) to be invested in the securities of such issuer (other than
securities or obligations issued or guaranteed by the United States or any
agency or instrumentality of the United States); provided that, for purposes
of this restriction the issuer of an option or futures contract shall not be
deemed to be the issuer of the security or securities underlying such
contract; and further provided that the fund may invest all or substantially
all of its assets in a qualifying portfolio.

(7) With respect to 75% of the total assets of the fund or portfolio,
purchase securities of any issuer if such purchase at the time thereof would
cause more than 10% of the voting securities of such issuer to be held by
the fund, except that all the assets of the fund may be invested in a
qualifying portfolio.

(8) Concentrate its investments in any particular industry, but the fund
may invest all of its assets in a qualifying portfolio (except that
positions in futures or options contracts shall not be subject to this
restriction).

(9) Issue any senior security (as that term is defined in the 1940 Act)
if such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder, except as appropriate to evidence a debt
incurred without violating Investment Restriction (1) above.

For purposes of restriction (1) above, arrangements with respect to
securities lending are not treated as borrowing. For purposes of restriction
(7) above, the fund also may purchase and sell securities issued by companies
that invest or deal in real estate or real estate investment trusts.

As an operating policy, the fund will not invest more than 15% of its net
assets (taken at market value) in securities for which there is no readily
available market. This policy is not fundamental and may be changed without
shareholder approval.

If a percentage or rating restriction on investment or utilization of assets
(taken at market value) set forth above or referred to in the fund's Prospectus
is adhered to at the time an investment is made or assets are so utilized, a
later change in percentage resulting from changes in the value of the securities
or a later change in the rating of the securities held for the fund or portfolio
will not be considered a violation of policy. If the value of the fund's
holdings of illiquid securities at any time exceeds the percentage limitation
applicable at the time of acquisition due to subsequent fluctuations in value or
other reasons, the board of trustees will consider what actions, if any, are
appropriate to maintain adequate liquidity.

5. PERFORMANCE INFORMATION

From time to time the fund may advertise its total return and average annual
total return in advertisements and/or other types of sales literature. These
figures are computed separately for Class A, Class B, Class L and Class Y shares
of the fund. These figures are based on historical earnings and are not intended
to indicate future performance. Total return is computed for a specified period
of time assuming deduction of the maximum sales charge, if any, from the initial
amount invested and reinvestment of all income dividends and capital gain
distributions on the reinvestment dates at prices calculated as stated in the
Prospectus, then dividing the value of the investment at the end of the period
so calculated by the initial amount invested and subtracting 100%. The standard
average annual total return, as prescribed by the SEC is derived from this total
return, which provides the ending redeemable value. Such standard total return
information may also be accompanied with nonstandard total return information
for differing periods computed in the same manner but without annualizing the
total return or taking sales charges into account. The fund may also include
comparative performance information in advertising or marketing its shares. Such
performance information may include data from Lipper Analytical Services, Inc.
and other financial publications.

From time to time, the trust may quote the fund's average annual total
return or total return in advertisements or in reports and other communications
to shareholders. The trust may include comparative performance information in
advertising or marketing the fund's shares. Such performance information may
include data from Lipper Analytical Services, Inc., Morningstar, Inc. and other
financial publications and may be included in various financial publications;
such as, Barron's, Business Week, CDA Investment Technologies, Inc., Changing
Times, Forbes, Fortune, Institutional Investor, Investor's Business Daily,
Money, Morningstar Mutual Fund Values, The New York Times, USA Today and The
Wall Street Journal. To the extent any advertisement or sales literature of the
fund describes the expenses or performance of any Class it will also disclose
such information for the other Classes.

AVERAGE ANNUAL TOTAL RETURN

The fund's "average annual total return," as described below, is computed
according to a formula prescribed by the SEC. The formula can be expressed as
follows:

P(1 + T)n = ERV

Where: P = a hypothetical initial payment of $1,000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value of a hypothetical $1,000 investment made at
the beginning of a 1-, 5- or 10-year period at the end of a 1-, 5- or
10-year period (or fractional portion thereof), assuming reinvestment of
all dividends and distributions.

The ERV assumes complete redemption of the hypothetical investment at the
end of the measuring period. The fund's net investment income changes in
response to fluctuations in interest rates and the expenses of the fund.

In computing total rates of return and yield quotations, all fund expenses
are included. However, fees that may be charged directly to a shareholder by
that shareholder's service agent are not included. Of course, any such fees will
reduce the shareholder's net return on investment.

Set forth below is average annual total rate of return information for the
Class A and Class B shares of the fund for the periods indicated, assuming that
dividends and capital gains distributions, if any, were reinvested. All
outstanding shares were designated Class A shares on January 4, 1999. Prior to
January 4, 1999, there were no sales charges on the purchase or sale of the
fund's shares. The Class A share performance for past periods has therefore been
adjusted to reflect the maximum sales charge currently in effect. The fund
offered Class B shares beginning January 4, 1999. For periods prior to that
date, Class B share performance includes the performance of the fund's Class A
shares, adjusted to take into account the deduction of the different contingent
deferred sales charges applicable to each such Class, rather than the initial
sales charge applicable to Class A shares. This blended performance has not been
adjusted to take into account differences in class- specific operating expenses.
Because operating expenses of Class B shares are different than those of Class A
shares, this blended Class B share performance is different than the performance
of Class B shares would have been had Class B shares been offered for the entire
period. Class L and Class Y shares were not offered until September 11, 2000.

Performance results include any applicable fee waivers or expense subsidies
in place during the time period, which may cause the results to be more
favorable than they otherwise would have been.

AVERAGE
ANNUAL
TOTAL RATE
OF RETURN
CITIFUNDS INTERNATIONAL LARGE CAP FUND
CLASS A
March 1, 1991 (commencement of operations) to December 31, 1999 ..... 9.45%
Five years ended December 31, 1999 .................................. 14.06%
One year ended December 31, 1999 .................................... 28.87%

CLASS B
January 4, 1999 (commencement of operations) to December 31, 1999 ... 25.35%
Five years ended December 31, 1999 .................................. 13.24%
One year ended December 31, 1999 .................................... 28.03%

For advertising and sales purposes, the fund will generally use the
performance of Class A shares. Class A shares are sold at net asset value plus a
current maximum sales charge of 5.00%. Performance will typically include this
maximum sales charge for the purposes of calculating performance figures. If the
performance of Class B, L or Y shares is used for advertising and sales
purposes, performance after class inception will be actual performance, while
performance prior to that date will be Class A performance, adjusted to reflect
the differences in sales charges (but may not reflect the differences in fees
and expenses) between the classes. For these purposes, it will be assumed that
the maximum contingent deferred sales charge applicable to the Class B and L
shares is deducted at the times, in the amount, and under the terms stated in
the Prospectus. Class B, L and Y share performance generally would have been
different than Class A performance, had the Class B, L and Y shares been offered
for the entire period, because the expenses attributable to Class B, L and Y
shares are different than the expenses attributable to the Class A shares. Fund
performance may also be presented in advertising and sales literature without
the inclusion of sales charges.

AGGREGATE TOTAL RETURN

The fund's "aggregate total return," as described below, represents the
cumulative change in the value of an investment in the fund for the specified
period and is computed by the following formula:

ERV - P

Where: P = a hypothetical initial payment of $10,000.
ERV = Ending Redeemable Value of a hypothetical $10,000 investment made
at the beginning of the 1-, 5- or 10-year period at the end of the 1-, 5-
or 10-year period (or fractional portion thereof), assuming reinvestment
of all dividends and distributions.

The ERV assumes complete redemption of the hypothetical investment at the
end of the measuring period.

AGGREGATE ANNUAL TOTAL RETURN

SINCE
CLASS OF SHARES 1-YEAR 5-YEAR 10-YEAR INCEPTION(1)
--------------- ------ ------ ------- ------------
Class A(2) 28.87% 14.06% N/A 9.45%
Class B(3) N/A N/A N/A 25.35%
----------
(1)All outstanding shares were designated Class A on January 4, 1999. Class B
shares commenced operations on January 4, 1999. Class L and Class Y shares
commenced operations on September 11, 2000.

(2)The average annual total return figure assumes that the maximum 5.00% sales
charge has been deducted from the investment at the time of purchase. If the
maximum sales charge had not been deducted, the average annual total return
for Class A shares for the same period would have been 35.66% and 10.09% for
one year and since inception of the fund, respectively.

(3)The average annual total return figure assumes that the maximum applicable
Deferred Sales Charge has been deducted from the investment at the time of
redemption. If the maximum Deferred Sales Charge had not been deducted, the
average annual total return for Class B shares for the same period would have
been 31.95% since inception of the fund, respectively.

There were no Class L or Y shares outstanding on December 31, 1999.

Performance will vary from time to time depending upon market conditions,
the composition of the fund's portfolio and operating expenses and the expenses
exclusively attributable to the Class. Consequently, any given performance
quotation should not be considered representative of the Class's performance for
any specified period in the future. Because performance will vary, it may not
provide a basis for comparing an investment in the Class with certain bank
deposits or other investments that pay a fixed yield for a stated period of
time. Investors comparing a Class's performance with that of other mutual funds
should give consideration to the quality and maturity of the respective
investment companies' portfolio securities.

6. DETERMINATION OF NET ASSET VALUE;
VALUATION OF SECURITIES

The net asset value per share of the fund is determined for each class on
each day during which the New York Stock Exchange is open for trading (a
"business day"). As of the date of this Statement of Additional Information, the
Exchange is open for trading every weekday except for the following holidays (or
the days on which they are observed): New Year's Day, Martin Luther King Jr.
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day. This determination of net asset value is
made once each day as of the close of regular trading on such Exchange (normally
4:00 p.m. Eastern time) by adding the market value of all securities and other
assets attributable to the class (including its interest in the portfolio), then
subtracting the liabilities attributable to that class, and then dividing the
result by the number of outstanding shares of the class. The net asset value per
share is effective for orders received and accepted by the service agent prior
to its calculation.

The value of the portfolio's net assets (i.e. the value of its securities
and other assets less its liabilities, including expenses payable or accrued) is
determined at the same time and on the same days as the net asset value per
share of the fund is determined. The net asset value of the fund's investment in
the portfolio is equal to the fund's pro rata share of the net assets of the
portfolio.

For purposes of calculating net asset value per share, all assets and
liabilities initially expressed in non-U.S. currencies will be converted into
U.S. dollars at the prevailing market rates or if there are no market rates, at
fair value at the time of valuation. Equity securities are valued at the last
sale price on the exchange on which they are primarily traded or on the NASDAQ
system for unlisted national market issues, or at the last quoted bid price for
securities in which there were no sales during the day or for unlisted
securities not reported on the NASDAQ system. Securities listed on a foreign
exchange are valued at the last quoted sale price available before the time when
net assets are valued. Bonds and other fixed income securities (other than
short-term obligations) are valued on the basis of valuations furnished by a
pricing service, use of which has been approved by the board of trustees of the
trust. In making such valuations, the pricing service utilizes both
dealer-supplied valuations and electronic data processing techniques that take
into account appropriate factors such as institutional-size trading in similar
groups of securities, yield, quality, coupon rate, maturity, type of issue,
trading characteristics and other market data, without exclusive reliance upon
quoted prices or exchange or over-the-counter prices, since such valuations are
believed to reflect more accurately the fair value of such securities.
Short-term obligations (maturing in 60 days or less) are valued at amortized
cost, which constitutes fair value as determined by the board of trustees of the
trust. Securities for which there are no such valuations are valued at fair
value as determined in good faith by or at the direction of the board of
trustees of the trust.

Trading in securities on most foreign exchanges and over-the-counter markets
is normally completed before the close of regular trading on the Exchange and
may also take place on days on which the Exchange is closed. If events
materially affecting the value of foreign securities occur between the time when
the exchange on which they are traded closes and the time when the fund's net
asset value is calculated, such securities may be valued at fair value in
accordance with procedures established by and under the general supervision of
the board of trustees of the trust.

Interest income on long-term obligations held for the fund is determined on
the basis of interest accrued plus amortization of "original issue discount"
(generally, the difference between issue price and stated redemption price at
maturity) and premiums (generally, the excess of purchase price over stated
redemption price at maturity). Interest income on short-term obligations is
determined on the basis of interest accrued plus amortization of any premium.

7. ADDITIONAL INFORMATION ON THE PURCHASE AND SALE
OF FUND SHARES AND SHAREHOLDER PROGRAMS

As described in the Prospectus, the fund provides you with alternative ways
of purchasing shares based upon your individual investment needs.

Each class of shares of the fund represents an interest in the same
portfolio of investments. Each class is identical in all respects except that
each class bears its own class expenses, including distribution and service fees
and service agent fees, and each class has exclusive voting rights with respect
to any distribution plan or administrative services plan applicable to its
shares. As a result of the differences in the expenses borne by each class of
shares, net income per share, dividends per share and net asset value per share
will vary for each class of shares. There are no conversion, preemptive or other
subscription rights, except that Class B shares automatically convert to Class A
shares in eight years as more fully described below.

Shareholders of each class will share expenses proportionately for services
that are received equally by all shareholders. A particular class of shares will
bear only those expenses that are directly attributable to that class, where the
type or amount of services received by a class varies from one class to another.
The expenses that may be borne by specific classes of shares may include (i)
transfer agency fees attributable to a specific class of shares, (ii) printing
and postage expenses related to preparing and distributing materials such as
shareholder reports, prospectuses and proxy statements to current shareholders
of a specific class of shares, (iii) SEC and state securities registration fees
incurred by a specific class, (iv) the expense of administrative personnel and
services required to support the shareholders of a specific class of shares, (v)
litigation or other legal expenses relating to a specific class of shares, (vi)
accounting expenses relating to a specific class of shares and (vii) any
additional incremental expenses subsequently identified and determined to be
properly allocated to one or more classes of shares.

The following classes of shares are available for purchase. See the
prospectus for a discussion of factors to consider in selecting which Class of
shares to purchase and for applicable service/distribution fees.

CLASS A SHARES

Class A shares are sold to investors at the public offering price, which is
the net asset value plus an initial sales charge as follows:

The fund receives the entire net asset value of all Class A shares that are
sold. The distributor retains the full applicable sales charge from which it
pays the uniform reallowances shown in the table below to service agents which
are broker-dealers. The distributor retains the full applicable sales charge
with respect to Class A shares sold by service agents that are not
broker-dealers.

<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE DEALER REALLOWANCE
AMOUNT OF AS A % OF AS A % OF AS A % OF
INVESTMENT OFFERING PRICE INVESTMENT OFFERING PRICE
---------- -------------- ---------- --------------
<S> <C> <C> <C>
Less than $25,000 ................................ 5.00% 5.26% 4.50%
$25,000 to less than $50,000 ..................... 4.25% 4.44% 3.83%
$50,000 to less than $100,000 .................... 3.75% 3.90% 3.38%
$100,000 to less than $250,000 ................... 3.25% 3.36% 2.93%
$250,000 to less than $500,000 ................... 2.75% 2.83% 2.48%
$500,000 to less than $1,000,000 ................ 2.00% 1.80% 1.80%
$1,000,000 or more ............................... -0-* -0-* up to 1.00%
------------
* Purchases of Class A shares of $1,000,000 or more will be made at net asset value without any initial sales charge, but
will be subject to a Deferred Sales Charge of 1.00% on redemptions made within 12 months of purchase. The deferred sales
charge on Class A shares is payable to certain broker-dealers, financial intermediaries, financial institutions or the
distributor's financial consultants (each called a "service agent") whose clients make purchases of $1,000,000 or more. The
deferred sales charge is waived in the same circumstances in which the Deferred Sales Charge applicable to Class B and
Class L shares is waived. See "Deferred Sales Charge Provisions" and "Waivers of Deferred Sales Charge."
</TABLE>

Service agents may receive up to 90% of the sales charge and may be deemed
to be underwriters of the fund as defined in the 1933 Act. The reduced sales
charges shown above apply to the aggregate of purchases of Class A shares of the
fund made at one time by "any person," which includes an individual and his or
her immediate family, or a trustee or other fiduciary of a single trust estate
or single fiduciary account.

The initial sales charge on Class A shares may be waived in certain
circumstances. See "Sales Charge Waivers and Reductions" below for more
information about waivers of initial sales charges on Class A shares.

CLASS B SHARES

Class B shares are sold without an initial sales charge but are subject to
a Deferred Sales Charge payable upon certain redemptions. See "Deferred Sales
Charge Provisions" below.

The distributor pays commissions to service agents which are broker-dealers
of 4.50% of the offering price of Class B shares sold by these entities. The
distributor keeps the full applicable sales charge with respect to Class B
shares sold by service agents that are not broker-dealers. These commissions are
not paid on exchanges from other Smith Barney mutual funds or on sales of Class
B shares to investors exempt from the CDSC. The distributor is compensated for
these payments through the receipt of the ongoing distribution fees from the
fund, and through the CDSC, if any. The distributor will also advance the first
year service fee to dealers at an annual rate equal to 0.25% of the average
daily net assets represented by Class B shares sold by them. As a result, the
total amount paid to a dealer upon the purchase of Class B shares may be a
maximum of 4.75% of the purchase price of the Class B shares.

CLASS L SHARES

Class L shares are sold with an initial sales charge of 1.00% (which is
equal to 1.01% of the amount invested) and are subject to a Deferred Sales
Charge payable upon certain redemptions. Service agents selling Class L shares
receive a commission of up to 2.00% of the purchase price of the Class L shares
they sell. Starting in the 13th month after purchase, Service Agents also will
receive an annual fee of up to 1.00% of the average daily net assets represented
by the Class L shares that they have sold. See "Deferred Sales Charge
Provisions" below. Until June 22, 2001 purchases of Class L shares by investors
who were holders of Class C shares of another Smith Barney mutual fund on June
12, 1998 will not be subject to the 1% initial sales charge.

CLASS Y SHARES

Class Y shares are sold without an initial sales charge or Deferred Sales
Charge and are available only to investors investing a minimum of $15,000,000
(except purchases of Class Y shares by Smith Barney Concert Allocation Series
Inc., for which there is no minimum purchase amount).

From time to time, the distributor or the adviser, at its expense, may
provide additional commissions, compensation or promotional incentives
("concessions") to dealers that sell or arrange for the sale of shares of the
fund. Such concessions provided by the distributor or the adviser may include
financial assistance to dealers in connection with pre-approved conferences or
seminars, sales or training programs for invited registered representatives and
other employees, payment for travel expenses, including lodging, incurred by
registered representatives and other employees for such seminars or training
programs, seminars for the public, advertising and sales campaigns regarding the
fund, and/or other dealer-sponsored events. From time to time, the distributor
or the adviser may make expense reimbursements for special training of a
dealer's registered representatives and other employees in group meetings or to
help pay the expenses of sales contests. Other concessions may be offered to the
extent not prohibited by state laws or any self-regulatory agency, such as the
NASD.

GENERAL

Investors may purchase shares from a service agent that has entered into a
sales or service agreement with the distributor concerning the fund. In
addition, certain investors, including qualified retirement plans purchasing
through certain service agents, may purchase shares directly from the fund. When
purchasing shares of the fund, investors must specify whether the purchase is
for Class A, Class B, Class L or Class Y shares. Service agents may charge their
customers an annual account maintenance fee in connection with a brokerage
account through which an investor purchases or holds shares. Accounts held
directly by the fund are not subject to a maintenance fee.

Investors in Class A, Class B and Class L shares may open an account in the
fund by making an initial investment of at least $1,000 for each account, or
$250 for an IRA, a Self-Employed Retirement Plan, or Uniform Gift to Minor
account, in the fund. Investors in Class Y shares may open an account by making
an initial investment of $15,000,000. Subsequent investments of at least $50 may
be made for all Classes. For participants in retirement plans qualified under
Section 403(b)(7) or Section 401(c) of the Code, the minimum initial investment
required for Class A, Class B and Class L shares and the subsequent investment
requirement for all Classes in the fund is $25. For shareholders purchasing
shares of the fund through the Systematic Investment Plan on a monthly basis,
the minimum initial investment requirement for Class A, Class B and Class L
shares and subsequent investment requirement for all Classes is $25. For
shareholders purchasing shares of the fund through the Systematic Investment
Plan on a quarterly basis, the minimum initial investment required for Class A,
Class B and Class L shares and the subsequent investment requirement for all
Classes is $50. There are no minimum investment requirements for Class A shares
for employees of Citigroup and its subsidiaries, including Salomon Smith Barney,
unitholders who invest distributions from a unit investment trust ("UIT")
sponsored by Salomon Smith Barney, and Directors/Trustees of any Citigroup
affiliated fund, including the Smith Barney mutual funds, and their spouses and
children. The fund reserves the right to waive or change minimums, to decline
any order to purchase its shares and to suspend the offering of shares from time
to time. Shares purchased will be held in the shareholder's account by the
sub-transfer agent. Share certificates are only issued upon a shareholder's
written request to the sub-transfer agent.

Purchase orders received by the fund prior to the close of regular trading on
the New York Stock Exchange ("NYSE"), on any day the fund calculates its net
asset value, are priced according to the net asset value determined on that day
(the "trade date"). Orders received by a service agent prior to the close of
regular trading on the NYSE, on any day the fund calculates is net asset value,
are priced according to the net asset value determined on the trade date,
provided the order is received by the fund or the fund's agent prior to its
close of business. For shares purchased through a service agent, payment for
shares of the fund is due on the third business day after the trade date. In all
other cases, payment must be made with the purchase order.

SYSTEMATIC INVESTMENT PLAN

Class A, B and L shareholders may make additions to their accounts at any
time by purchasing shares through a service known as the Systematic Investment
Plan. Under the Systematic Investment Plan, a service agent or the sub- transfer
agent is authorized through preauthorized transfers of at least $25 on a monthly
basis or at least $50 on a quarterly basis to charge the shareholder's account
held with a bank or other financial institution on a monthly or quarterly basis
as indicated by the shareholder, to provide for systematic additions to the
shareholder's fund account. A shareholder who has insufficient funds to complete
the transfer will be charged a fee of up to $25 by its service agent or the
sub-transfer agent. The Systematic Investment Plan also authorizes a service
agent to apply cash held in the shareholder's brokerage account opened with the
service agent or redeem the shareholder's shares of certain money market funds
to make additions to the account. Additional information is available from the
fund or your service agent.

SALES CHARGE WAIVERS AND REDUCTIONS
INITIAL SALES CHARGE WAIVERS

Purchases of Class A shares may be made at net asset value without a sales
charge in the following circumstances: (a) sales to (i) board members and
employees of Citigroup and its subsidiaries and any Citigroup affiliated funds
including the Smith Barney mutual funds (including retired board members and
employees); the immediate families of such persons (including the surviving
spouse of a deceased board member or employee); and to a pension, profit-sharing
or other benefit plan for such persons and (ii) employees of members of the
National Association of Securities Dealers, Inc., provided such sales are made
upon the assurance of the purchaser that the purchase is made for investment
purposes and that the securities will not be resold except through redemption or
repurchase; (b) offers of Class A shares to any other investment company to
effect the combination of such company with the fund by merger, acquisition of
assets or otherwise; (c) purchases of Class A shares by any client of financial
consultants or other registered representatives affiliated with Citigroup who
recently joined a broker-dealer that has a sales agreement with the distributor
concerning the fund, if certain conditions are met; (d) purchases by
shareholders who have redeemed Class A shares in the fund (or Class A shares of
another Smith Barney mutual fund that is offered with a sales charge) and who
wish to reinvest their redemption proceeds in the fund, provided the
reinvestment is made within 60 calendar days of the redemption; (e) purchases by
accounts managed by certain investment advisory subsidiaries of Citigroup; (f)
direct rollovers by plan participants of distributions from a 401(k) plan
offered to employees of Citigroup or its subsidiaries or a 401(k) plan enrolled
in the Smith Barney 401(k) Program (Note: subsequent investments will be subject
to the applicable sales charge); (g) purchases by a separate account used to
fund certain unregistered variable annuity contracts; (h) investments of
distributions from or proceeds from a sale of a UIT sponsored by Salomon Smith
Barney; (i) purchases by investors participating in a Salomon Smith Barney fee-
based arrangement; and (j) purchases of Class A shares by Section 403(b) or
Section 401(a) or (k) accounts associated with certain Citigroup affiliates,
including Copeland Retirement Programs. In order to obtain such discounts, the
purchaser must provide sufficient information at the time of purchase to permit
verification that the purchase would qualify for the elimination of the sales
charge.

RIGHT OF ACCUMULATION

Class A shares of the fund may be purchased by "any person", which includes
an individual and his or her immediate family, or a trustee or other fiduciary
of a single trust estate or single fiduciary account, at a reduced sales charge
or at net asset value determined by aggregating the dollar amount of the new
purchase and the total net asset value of all Class A shares of the fund and of
most other Smith Barney mutual funds that are offered with a sales charge then
held by such person and applying the sales charge applicable to such aggregate.
In order to obtain such discount, the purchaser must provide sufficient
information at the time of purchase to permit verification that the purchase
qualifies for the reduced sales charge. The right of accumulation is subject to
modification or discontinuance at any time with respect to all shares purchased
thereafter. Additional Information is available from the fund or the investor's
service agent.

LETTER OF INTENT - CLASS A SHARES

A Letter of Intent for an amount of $50,000 or more provides an opportunity
for an investor to obtain a reduced sales charge by aggregating investments over
a 13 month period, provided that the investor refers to such Letter when placing
orders. For purposes of a Letter of Intent, the "Amount of Investment" as
referred to in the preceding sales charge table includes (i) all Class A shares
of the fund and other Smith Barney mutual funds offered with a sales charge
acquired during the term of the Letter plus (ii) the value of all Class A shares
previously purchased and still owned. Each investment made during the period
receives the reduced sales charge applicable to the total amount of the
investment goal. If the goal is not achieved within the period, the investor
must pay the difference between the sales charges applicable to the purchases
made and the charges previously paid, or an appropriate number of escrowed
shares will be redeemed. The term of the Letter will commence upon the date the
Letter is signed, or at the option of the investor, up to 90 days before such
date. Please contact your service agent or the transfer agent to obtain a Letter
of Intent application.

LETTER OF INTENT - CLASS Y SHARES

A Letter of Intent may also be used as a way for investors to meet the
minimum investment requirement for Class Y shares (except purchases of Class Y
shares of Smith Barney Concert Allocation Series Inc., for which there is no
minimum purchase amount). Such investors must make an initial minimum purchase
of $5,000,000 in Class Y shares of the fund and agree to purchase a total of
$15,000,000 of Class Y shares of the fund within 13 months from the date of the
Letter. If a total investment of $15,000,000 is not made within the 13 month
period, all Class Y shares purchased to date will be converted to Class A
shares, where they will be subject to all fees (including a service fee of
0.25%) and expenses applicable to the fund's Class A shares, which may include a
deferred sales charge of 1.00%. Please contact your service agent or the
transfer agent for further information.

DEFERRED SALES CHARGE PROVISIONS

"Deferred Sales Charge Shares" are applicable to: (a) Class B shares; (b)
Class L shares; and (c) Class A shares that were purchased without an initial
sales charge but are subject to a Deferred Sales Charge. A Deferred Sales Charge
may be imposed on certain redemptions of these shares.

Any applicable Deferred Sales Charge will be assessed on an amount equal to
the lesser of the original cost of the shares being redeemed or their net asset
value at the time of redemption. Deferred Sales Charge Shares that are redeemed
will not be subject to a Deferred Sales Charge to the extent that the value of
such shares represents: (a) capital appreciation of fund assets; (b)
reinvestment of dividends or capital gain distributions; (c) with respect to
Class B shares, shares redeemed six years or later since their purchase; or (d)
with respect to Class L shares and Class A shares that are Deferred Sales Charge
Shares, shares redeemed more than 12 months after their purchase.

Class L shares and Class A shares that are Deferred Sales Charge Shares are
subject to a 1.00% Deferred Sales Charge if redeemed within 12 months of
purchase. In circumstances in which the Deferred Sales Charge is imposed on
Class B shares, the amount of the charge will depend on the number of years
since the shareholder made the purchase payment from which the amount is being
redeemed. Solely for purposes of determining the number of years since a
purchase payment, all purchase payments made during a month will be aggregated
and deemed to have been made on the last day of the preceding account statement
month. The following table sets forth the rates of the charge for redemptions of
Class B shares by shareholders, except in the case of Class B shares held under
the Smith Barney 401(k) Program, as described below. See "Purchase of Shares --
Smith Barney 401(k) and ExecChoice(TM) Programs."

YEAR SINCE PURCHASE WAS MADE CDSC ON SHARES BEING SOLD

1st 5%
2nd 4%
3rd 3%
4th 2%
5th 1%
6th and thereafter None

Class B shares will convert automatically to Class A shares eight years
after the date on which they were purchased and thereafter will no longer be
subject to the higher Class B share distribution fees. There will also be
converted at that time such proportion of Class B Dividend Shares (Class B
shares that were acquired through the reinvestment of dividends and
distributions) owned by the shareholder as the total number of his or her Class
B shares converting at the time bears to the total number of outstanding Class B
shares (other than Class B Dividend Shares) owned by the shareholder.

The length of time that Deferred Sales Charge Shares acquired through an
exchange have been held will be calculated from the date that the shares
exchanged were initially acquired in one of the other Smith Barney or CitiFunds
mutual funds, and fund shares being redeemed will be considered to represent, as
applicable, capital appreciation or dividend and capital gain distribution
reinvestments in such other funds. For Federal income tax purposes, the amount
of the Deferred Sales Charge will reduce the gain or increase the loss, as the
case may be, on the amount realized on redemption. The amount of any deferred
sales charge will be paid to the fund's distributor.

To provide an example, assume an investor purchased 100 Class B shares of
the fund at $10 per share for a cost of $1,000. Subsequently, the investor
acquired five additional shares of the fund through dividend reinvestment.
During the fifteenth month after the purchase, the investor decided to redeem
$500 of his or her investment. Assuming at the time of the redemption the net
asset value had appreciated to $12 per share, the value of the investor's shares
would be $1,260 (105 shares at $12 per share). The Deferred Sales Charge would
not be applied to the amount which represents appreciation ($200) and the value
of the reinvested dividend shares ($60). Therefore, $240 of the $500 redemption
proceeds ($500 minus $260) would be charged at a rate of 4.00% (the applicable
rate for Class B shares) for a total Deferred Sales Charge of $9.60.

WAIVERS OF DEFERRED SALES CHARGE

The Deferred Sales Charge will be waived on: (a) exchanges (see "Exchange
Privilege"); (b) automatic cash withdrawals in amounts equal to or less than
1.00% per month of the value of the shareholder's shares at the time the
withdrawal plan commences (see "Automatic Cash Withdrawal Plan") (provided,
however, that automatic cash withdrawals in amounts equal to or less than 2.00%
per month of the value of the shareholder's shares will be permitted for
withdrawal plans that were established prior to November 7, 1994); (c)
redemptions of shares within 12 months following the death or disability of the
shareholder; (d) redemptions of shares made in connection with qualified
distributions from retirement plans or IRAs upon the attainment of age 5912;
(e) involuntary redemptions; and (f) redemptions of shares to effect a
combination of the fund with any investment company by merger, acquisition of
assets or otherwise. In addition, a shareholder who has redeemed shares from
other Smith Barney mutual funds may, under certain circumstances, reinvest all
or part of the redemption proceeds within 60 days and receive pro rata credit
for any Deferred Sales Charge imposed on the prior redemption.

Deferred Sales Charge waivers will be granted subject to confirmation (by
service agents in the case of shareholders who are also clients of service
agents or by the transfer agent in the case of all other shareholders) of the
shareholder's status or holdings, as the case may be.

SALOMON SMITH BARNEY RETIREMENT PROGRAMS

You may be eligible to participate in a retirement program sponsored by
Salomon Smith Barney or one of its affiliates. The fund offers Class A and Class
L shares at net asset value to participating plans under the programs. You can
meet minimum investment and exchange amounts, if any by combining the plan's
investments in any of the Smith Barney mutual funds.

There are no sales charges when you buy or sell shares and the Class of
shares you may purchase depends on the amount of your initial investment and/ or
the date your account is opened. Once a class of shares is chosen, all
additional purchases must by of the same Class.

For plans opened on or after March 1, 2000 that are not plans for which
Paychex, Inc. or an affiliate provides administrative services (a "Paychex
plan"), Class A shares may be purchased regardless of the amount invested.

For plans opened prior to March 1, 2000 and for Paychex plans, the Class of
shares you may purchase depends on the amount of your initial investment:

Class A Shares. Class A shares may be purchased by plans investing at
least $1 million.

Class L Shares. Class L shares may be purchased by plans investing less than
$1 million. Class L shares are eligible to exchange into Class A shares not
later than 8 years after the plan joined the program. They are eligible for
exchange in the following circumstances:

If the plan was opened on or after June 21, 1996 and a total of $1 million
is invested in Smith Barney Funds Class L shares (other than money market
funds), all Class L shares are eligible for exchange after the plan is in the
program for 5 years.

If the plan was opened before June 21, 1996 and a total of $500,000 is
invested in Smith Barney Funds Class L shares (other than money market funds) on
December 31 in any year, all Class L shares are eligible for exchange on or
about March 31 of the following year.

For more information, call your service agent or the transfer agent.

Retirement Programs Opened On or after June 21, 1996. If, at the end of the
fifth year after the date the participating plan enrolled in the Smith Barney
401(k) Program or ExecChoice(TM) Program, a participating plan's total Class L
holdings in all non-money market Smith Barney mutual funds equal at least
$1,000,000, the participating plan will be offered the opportunity to exchange
all of its Class L shares for Class A shares of the fund. (For participating
plans that were originally established through a Salomon Smith Barney retail
brokerage account, the five-year period will be calculated from the date the
retail brokerage account was opened.) Such participating plans will be notified
of the pending exchange in writing within 30 days after the fifth anniversary of
the enrollment date and, unless the exchange offer has been rejected in writing,
the exchange will occur on or about the 90th day after the fifth anniversary
date. If the participating plan does not qualify for the five-year exchange to
Class A shares, a review of the participating plan's holdings will be performed
each quarter until either the participating plan qualifies or the end of the
eighth year.

Retirement Programs Opened Prior to June 21, 1996: In any year after the
date a participating plan enrolled in the Smith Barney 401(k) Program, if its
total Class L holdings in all non-money market Smith Barney mutual funds equal
at least $500,000 as of the calendar year-end, the participating plan will be
offered the opportunity to exchange all of its Class L shares for Class A shares
of the same fund. Such Plans will be notified in writing within 30 days after
the last business day of the calendar year and, unless the exchange offer has
been rejected in writing, the exchange will occur on or about the last business
day of the following March.

Any participating plan in the Smith Barney 401(k) or the ExecChoice(TM)
Program, whether opened before or after June 21, 1996, that has not previously
qualified for an exchange into Class A shares will be offered the opportunity to
exchange all of its Class L shares for Class A shares of the fund, regardless of
asset size, at the end of the eighth year after the date the participating plan
enrolled in the Smith Barney 401(k) Program or ExecChoice(TM) Program. Such
plans will be notified of the pending exchange in writing approximately 60 days
before the eighth anniversary of the enrollment date and, unless the exchange
has been rejected in writing, the exchange will occur on or about the eighth
anniversary date. Once an exchange has occurred, a participating plan will not
be eligible to acquire additional Class L shares, but instead may acquire Class
A shares of the same fund. Any Class L shares not converted will continue to be
subject to the distribution fee.

Participating plans wishing to acquire shares of the fund through the Smith
Barney 401(k) Program or the Smith Barney ExecChoice(TM) Program must purchase
such shares directly from the transfer agent. For further information regarding
these Programs, investors should contact the transfer agent.

Retirement Programs Investing in Class B Shares: Class B shares of the fund
are not available for purchase by participating plans opened on or after June
21, 1996, but may continue to be purchased by any participating plan in the
Smith Barney 401(k) Program opened prior to such date and originally investing
in such Class. Class B shares acquired are subject to a Deferred Sales Charge of
3.00% of redemption proceeds if the participating plan terminates within eight
years of the date the participating plan first enrolled in the Smith Barney
401(k) Program.

At the end of the eighth year after the date the participating plan enrolled
in the Smith Barney 401 (k) Program, the participating plan will be offered the
opportunity to exchange all of its Class B shares for Class A shares of the same
fund. Such participating plan will be notified of the pending exchange in
writing approximately 60 days before the eighth anniversary of the enrollment
date and, unless the exchange has been rejected in writing, the exchange will
occur on or about the eighth anniversary date. Once the exchange has occurred, a
participating plan will not be eligible to acquire additional Class B shares,
but instead may acquire Class A shares of a the same fund. If the participating
plan elects not to exchange all of its Class B shares at that time, each Class B
share held by the participating plan will have the same conversion feature as
Class B shares held by other investors. See "Purchase of Shares-Deferred Sales
Charge Alternatives."

No deferred sales charge is imposed on redemptions of Class B shares to the
extent that the net asset value of the shares redeemed does not exceed the
current net asset value of the shares purchased through reinvestment of
dividends or capital gain distributions, plus the current net asset value of
Class B shares purchased more than eight years prior to the redemption, plus
increases in the net asset value of the shareholder's Class B shares above the
purchase payments made during the preceding eight years. Whether or not the
Deferred Sales Charge applies to the redemption by a participating plan depends
on the number of years since the participating plan first became enrolled in the
Smith Barney 401(k) Program, unlike the applicability of the Deferred Sales
Charge to redemptions by other shareholders, which depends on the number of
years since those shareholders made the purchase payment from which the amount
is being redeemed.

The deferred sales charge will be waived on redemptions of Class B shares in
connection with lump-sum or other distributions made by a participating plan as
a result of (a) the retirement of an employee in the participating plan; (b) the
termination of employment of an employee in the participating plan; (c) the
death or disability of an employee in the participating plan; (d) the attainment
of age 5912 by an employee in the participating plan; (e) hardship of an
employee in the participating plan to the extent permitted under Section 401(k)
of the Code; or (f) redemptions of shares in connection with a loan made by the
participating plan to an employee.

REDEMPTION OF SHARES

General. The fund is required to redeem the shares tendered to it, as
described below, at a redemption price equal to their net asset value per share
next determined after receipt of a written request in proper form at no charge
other than any applicable Deferred Sales Charge. Redemptoin requests received
after the close of regular trading on the NYSE are priced at the net asset value
next determined.

If a shareholder holds shares in more than one Class, any request for
redemption must specify the Class being redeemed. In the event of a failure to
specify which Class, or if the investor owns fewer shares of the Class than
specified, the redemption request will be delayed until the transfer agent
receives further instructions from the shareholder's service agent, or if the
shareholder's account is not with a service agent, from the shareholder
directly. The redemption proceeds will be remitted on or before the third
business day following receipt of proper tender, except on days on which the
NYSE is closed or as permitted under the 1940 Act, in extraordinary
circumstances. Generally, if the redemption proceeds are remitted to a Salomon
Smith Barney brokerage account, these funds will not be invested for the
shareholder's benefit without specific instruction and Smith Barney will benefit
from the use of temporarily uninvested funds. Redemption proceeds for shares
purchased by check, other than a certified or official bank check, will be
remitted upon clearance of the check, which may take up to fifteen days or more.

Shares held by Salomon Smith Barney as custodian must be redeemed by
submitting a written request to a Salomon Smith Barney Financial Consultant.
Shares other than those held by Salomon Smith Barney as custodian may be
redeemed through an investor's Service Agent, or by submitting a written request
for redemption to:

Smith Barney International Large Cap Fund
Class A, B, L or Y (please specify)
c/o PFPC Global Fund Services
P.O. Box 9699
Providence Rhode Island 02940-9699.

A written redemption request must (a) state the name of the fund for which
you are redeeming shares, (b) state the Class and number or dollar amount of
shares to be redeemed, (c) identify the shareholder's account number and (d) be
signed by each registered owner exactly as the shares are registered. If the
shares to be redeemed were issued in certificate form, the certificates must be
endorsed for transfer (or be accompanied by an endorsed stock power) and must be
sumitted to the transfer agent together with the redemption request. Any
signature appearing on a shares certificate, stock power or written redemption
request in excess of $50,000 must be guaranteed by an eligible guarantor
institution such as a domestic bank, savings and loan institution, domestic
credit union, member bank of the Federal Reserve System or member firm of a
national securities exchange. Written redemption requests of $50,000 or less do
not require a signature guarantee unless more than one such redemption request
is made in any 10-day period. Redemption proceeds will be mailed to an
investor's address of record. The transfer agent may require additional
supporting documents for redemptions made by corporations, executors,
administrators, trustees or guardians. A redemption request will not be deemed
properly received until Citi Fiduciary receives all required documents in proper
form.

Automatic Cash Withdrawal Plan. An automatic cash withdrawal plan (the
"Withdrawal Plan") is available to shareholders who own shares with a value of
at least $10,000 ($5,000 for retirement plan accounts) and who wish to receive
specific amounts of cash monthly or quarterly. Withdrawals of at least $50 may
be made under the Withdrawal Plan by redeeming as many shares of the fund as may
be necessary to cover the stipulated withdrawal payment. Any applicable Deferred
Sales Charge will not be waived on amounts withdrawn by shareholders that exceed
1.00% per month of the value of a shareholder's shares at the time the
Withdrawal Plan commences. To the extent that withdrawals exceed dividends,
distributions and appreciation of a shareholder's investment in the fund, there
will be a reduction in the value of the shareholder's investment and continued
withdrawal payments will reduce the shareholder's investment, and may ultimately
exhaust it. Withdrawal payments should not be considered as income from
investment in the fund. Furthermore, as it generally would not be advantageous
to a shareholder to make additional investments in the fund at the same time he
or she is participating in the Withdrawal Plan, purchases by such shareholders
in amounts of less than $5,000 ordinarily will not be permitted. The Withdrawal
Plan will be carried over on exchanges between funds or classes of the fund.

Shareholders who wish to participate in the Withdrawal Plan and who hold
their shares of the fund in certificate form must first deposit their share
certificates with the sub-transfer agent as agent for Withdrawal Plan members.
All dividends and distributions on shares in the Withdrawal Plan are reinvested
automatically at net asset value in additional shares of the fund involved. A
shareholder who purchases shares directly from the fund may continue to do so
and applications for participation in the Withdrawal Plan must be received by
the sub-transfer agent no later than the eighth day of the month to be eligible
for participation beginning with that month's withdrawal. For additional
information, shareholders should contact their service agent or the fund's
transfer agent.

Telephone Redemption And Exchange Program. Shareholders who do not have a
Salomon Smith Barney brokerage account may be eligible to redeem and exchange
fund shares by telephone. To determine if a shareholder is entitled to
participate in this program, he or she should contact the Transfer Agent at
1-800-451-2010. Once eligiblity is confirmed, the shareholder must complete and
return a Telephone/Wire Authorization Form, along with a signature guarantee
that will be provided by the transfer agent upon request. (Alternatively, an
investor may authorize telephone redemptions on the new account application with
the applicant's signature guarantee when making his/ her initial investment in
the fund.)

Redemptions. Redemptions requests of up to $50,000 of any Class or Classes
of the fund's shares may be made by eligible shareholders by calling the
transfer agent at 1-800-451-2010. Such requests may be made between 9:00 a.m.
and 4:00 p.m. (New York City time) on any day the NYSE is open. Redemption
requests received after the close of regular trading on the NYSE are priced at
the net asset value next determined. Redemptions of shares (i) by retirement
plans or (ii) for which certificates have been issued, are not permitted under
this program.

A shareholder will have the option of having the redemption proceeds mailed
to his/her address of record or wired to a bank account predesignated by the
shareholder. Generally, redemption proceeds will be mailed or wired, as the case
may be, on the next business day following the redemption request. In order to
use the wire procedures, the bank receiving the proceeds must be a member of the
Federal Reserve System or have a correspondent relationship with a member bank.
The fund reserves the right to charge shareholers a nominal fee for each wire
redemption. Such charges, if any, will be assessed against the shareholder's
account from which such shares were redeemed. In order to change the bank
account designated to receive redemption proceeds, a shareholder must complete a
new Telephone/Wire Authorization Form and, for the protection of the
shareholder's assets, will be required to provide a signature guarantee and
certain other documentation.

Exchanges. Eligible shareholders may make exchanges by telephone if the
account registration of shares of the fund being acquired is identical to the
registration of the shares of the fund exchanged. Such exchange requests may be
made by calling the transfer agent at 1-800-451-2010 between 9:00 a.m. and 4:00
p.m. (New York City time) on any day on which the NYSE is open. Exchange
requests received after the close of regular trading on the NYSE are processed
at the net asset value next determined.

Additional Information regarding Telephone Redemption and Exchange Program.
Neither the fund nor its agents will be liable for following instructions
communicated by telephone that are reasonably believed to be genuine. The fund
and its agents will employ procedures designed to verify the identity of the
caller and legitimacy of instructions (for example, a shareholder's name and
account number will be required and phone calls may be recorded). The fund
reserves the right to suspend, modify or discontinue the telephone redemption
and exchange program or to impose a charge for this service at any time
following at least seven (7) days' prior notice to shareholders.

The right of redemption may be suspended or the date of payment postponed
(a) for any period during which the NYSE is closed (other than for customary
weekend and holiday closings), (b) when trading in markets the fund normally
utilizes is restricted, or an emergency as determined by the SEC existis, so
that disposal of the fund's investments or determination of net asset value is
not reasonably practicable or (c) for such other periods as the SEC by order may
permit for the protection of the funds's shareholders.

Distributions in Kind. If the board of trustees of the fund determines that
it would be detrimental to the best interests of the remaining shareholders of
the fund to make a redemption payment wholly in cash, the fund may pay, in
accordance with the SEC rules, any portion of a redemption in excess of the
lesser of $250,000 or 1% of the fund's net assets by a distribution in kind of
portfolio securities in lieu of cash. Shareholders should expect to incur
brokerage costs when subsequently selling shares redeemed in kind.

EXCHANGE PRIVILEGE

General. Except as noted below, shareholders of any of the Smith Barney
mutual funds may exchange all or part of their shares for shares of the same
Class of other Smith Barney mutual funds, to the extent such shares are offered
for sale in the shareholder's state of residence and provided your service agent
is authorized to distribute shares of the fund, on the basis of relative net
asset value per share at the time of exchange.

Class B shares of any fund may be exchanged for other Class B shares without
a sales charge. Class B shares of the fund exchanged for Class B shares of
another Smith Barney mutual fund will be subject to the higher applicable
Deferred Sales Charge of the two funds and, for purposes of calculating deferred
sales charge rates and conversion periods, will be deemed to have been held
since the date the shares being exchanged were deemed to be purchased.

Exchanges of Class A, Class B and Class L shares are subject to minimum
investment requirements and all shares are subject to the other requirements of
the fund into which exchanges are made.

The exchange privilege enables shareholders in any Smith Barney mutual fund
to acquire shares of the same Class in the fund with different investment
objectives when they believe a shift between funds is an appropriate investment
decision. This privilege is available to shareholders residing in any state in
which the fund shares being acquired may legally be sold. Prior to any exchange,
the shareholder should obtain and review a copy of the current prospectus of
each fund into which an exchange is being considered.
Prospectuses may be obtained from your service agent.

Upon receipt of proper instructions and all necessary supporting documents,
shares submitted for exchange are redeemed at the then-current net asset value
and, subject to any applicable Deferred Sales Charge, the proceeds are
immediately invested, at a price as described above, in shares of the fund being
acquired. The fund reserves the right to reject any exchange request. The
exchange privilege may be modified or terminated at any time after written
notice to shareholders.

Class B Exchanges. In the event a Class B shareholder wishes to exchange all
or a portion of his or her shares into any of the funds imposing a higher
Deferred Sales Charge than that imposed by the fund, the exchanged Class B
shares will be subject to the higher applicable Deferred Sales Charge. Upon an
exchange, the new Class B shares will be deemed to have been purchased on the
same date as the Class B shares of the fund that have been exchanged.

Class L Exchanges. Upon an exchange, the new Class L shares will be deemed
to have been purchased on the same date as the Class L shares of the fund that
have been exchanged.

Class A and Class Y Exchanges. Class A and Class Y shareholders of the fund
who wish to exchange all or a portion of their shares for shares of the
respective Class in another fund may do so without imposition of any charge.

ADDITIONAL INFORMATION REGARDING THE EXCHANGE PRIVILEGE

Although the exchange privilege is an important benefit, excessive exchange
transactions can be detrimental to the fund's performance and its shareholders.
The manager may determine that a pattern of frequent exchanges is excessive and
contrary to the best interests of the fund's other shareholders. In this event,
the fund may, at its discretion, decide to limit additional purchases and/or
exchanges by a shareholder. Upon such a determination, the fund will provide
notice in writing or by telephone to the shareholder at least 15 days prior to
suspending the exchange privilege and during the 15 day period the shareholder
will be required to (a) redeem his or her shares in the fund or (b) remain
invested in the fund or exchange into any of the funds of the Smith Barney
mutual funds ordinarily available, which position the shareholder would be
expected to maintain for a significant period of time. All relevant factors will
be considered in determining what constitutes an abusive pattern of exchanges.

Certain shareholders may be able to exchange shares by telephone. See
"Redemption of Shares -- Telephone Redemption and Exchange Program". Exchanges
will be processed at the net asset value next determined. Redemption procedures
discussed above are also applicable for exchanging shares, and exchanges will be
made upon receipt of all supporting documents in proper form. If the account
registration of the shares of the fund being acquired is identical to the
registration of the shares of the fund exchanged, no signature guarantee is
required. A capital gain or loss for tax purposes will be realized upon the
exchange, depending upon the cost or other basis of shares redeemed. Before
exchanging shares, investors should read the current prospectus describing the
shares to be acquired. The Fund reserves the right to modify or discontinue
exchange privileges upon 60 days' prior notice to shareholders.

This exchange privilege may be modified or terminated at any time, and is
available only in those jurisdictions where such exchanges legally may be made.
Before making any exchange, shareholders should contact the transfer agent or,
if they hold fund shares through service agents, their service agents to obtain
more information and prospectuses of the funds to be acquired through the
exchange. An exchange is treated as a sale of the shares exchanged and could
result in taxable gain or loss to the shareholder making the exchange.

DETERMINATION OF PUBLIC OFFERING PRICE

The fund offers its shares to the public on a continuous basis. The public
offering price for a Class A, Class B, Class L and Class Y share of the fund is
equal to the net asset value per share at the time of purchase, plus the
applicable initial sales charge. A deferred sales charge, however, is imposed on
certain redemptions of Class A, Class B and Class L shares. The method of
computation of the public offering price is shown in each fund's financial
statements, incorporated by reference in their entirety into this SAI.

8. MANAGEMENT

The fund is supervised by the board of trustees of the trust, and the
portfolio is supervised by the board of trustees of the portfolio trust. In each
case, a majority of the trustees are not affiliated with the adviser. In
addition, a majority of the disinterested trustees of the fund are different
from a majority of the disinterested trustees of the portfolio.

The trustees and officers of the trust and the portfolio trust, their ages
and their principal occupations during at least the past five years are set
forth below. Their titles may have varied during that period. Asterisks indicate
that those trustees and officers are "interested persons" (as defined in the
1940 Act) of the trust. Unless otherwise indicated below, the address of each
trustee and officer is 388 Greenwich Street, New York, New York. The address of
the portfolio trust is Elizabethan Square, George Town, Grand Cayman, British
West Indies.

TRUSTEES OF THE TRUST

PHILIP W. COOLIDGE*; 48 -- President of the trust and the portfolio trust;
Chief Executive Officer and President, Signature Financial Group, Inc. and
CFBDS, Inc. ("CFBDS").

RILEY C. GILLEY; 73 -- Vice President and General Counsel, Corporate Property
Investors (November 1988 to December 1991); Partner, Breed, Abbott & Morgan
(Attorneys) (retired, December 1987).

DIANA R. HARRINGTON; 60 -- Professor, Babson College (since September 1994);
Trustee, The Highland Family of Funds (March 1997 to March 1998).

SUSAN B. KERLEY; 48 -- Consultant, Global Research Associates, Inc.
(Investment Research) (since September 1990); Director, Mainstay Institutional
Funds (since December 1990).

HEATH B. MCLENDON*; 66 -- Chairman, President, and Chief Executive Officer of
SSB Citi Fund Management LLC (formerly known as SSBC Fund Management, Inc.)
(since March 1996); Managing Director of Salomon Smith Barney (since August
1993); President of Travelers Investment Advisers, Inc.; Chairman or Co-
Chairman of the Board of seventy-one investment companies sponsored by Salomon
Smith Barney. His address is 7 World Trade Center, New York, New York.

C. OSCAR MORONG, JR.; 65 -- Chairman of the board of trustees of the trust and
the portfolio trust; Managing Director, Morong Capital Management (since
February 1993); Director, Indonesia Fund (1990 to 1999); Trustee, MAS Funds
(since 1993).

E. KIRBY WARREN; 65 -- Professor of Management, Graduate School of Business,
Columbia University (1987 to December 1999).

TRUSTEES OF THE PORTFOLIO TRUST

ELLIOTT J. BERV; 57 -- Chief Executive Officer, Rocket City Enterprises
(Consulting, Publishing, Internet Services) (since January 2000); President
and Chief Executive Officer, Catalyst, Inc. (Management Consultants) (since
June 1992); President and Director, Elliott J. Berv & Associates (Management
Consultants) (since May 1984).

PHILIP W. COOLIDGE*; 48 -- President of the trust and the portfolio trust;
Chief Executive Officer and President, Signature Financial Group, Inc. and
CFBDS.

MARK T. FINN; 56 -- President and Director, Delta Financial, Inc. (since June
1983); Chairman of the Board and part Owner, FX 500 Ltd. (Commodity Trading
Advisory Firm) (April 1990 to February 1996); General Partner and Shareholder,
Greenwich Ventures LLC (Investment Partnership) (since January 1996);
President, Secretary and Owner, Phoenix Trading Co. (Commodity Trading
Advisory Firm) (since March 1997); Director, Chairman and Owner, Vantage
Consulting Group, Inc. (since October 1988).

WALTER E. ROBB, III; 73 -- President, Benchmark Consulting Group, Inc. (since
1991); Principal, Robb Associates (Corporate Financial Advisors) (since 1978);
President and Treasurer, Benchmark Advisors, Inc. (Corporate Financial
Advisors) (since 1989); Trustee of certain registered investment companies in
the MFS Family of Funds (since 1985).

E. KIRBY WARREN, 65 -- Professor of Management, Graduate School of Business,
Columbia University (1987 to December 1999).

OFFICERS OF THE TRUST AND THE PORTFOLIO TRUST

HEATH B. McLENDON*; 66 -- President of the trust; Chairman, President, and Chief
Executive Officer of SSB Citi (since March 1996); Managing Director of Salomon
Smith Barney (since August 1993); President of Travelers Investment Adviser,
Inc. ("TIA"); Chairman or Co-Chairman of the Board of seventy-one investment
companies associated with Salomon Smith Barney. His address is 7 World Trade
Center, New York, New York 10048.

LEWIS E. DAIDONE*; 42 -- Senior Vice President and Treasurer of the trust;
Managing Director of Salomon Smith Barney; Chief Financial Officer of the Smith
Barney mutual funds; Treasurer and Senior Vice President or Executive Vice
President of sixty-one investment companies associated with Citigroup; Director
and Senior Vice President of SSB Citi and TIA. His address is 125 Broad Street,
New York, New York 10004.

IRVING DAVID*; 39 -- Controller of the trust; Director of Salomon Smith Barney;
formerly Assistant Treasurer of First Investment Management Company. Controller
or Assistant Treasurer of fifty-three investment companies associated with
Citigroup. His address is 125 Broad Street, New York, New York 10004.

FRANCES GUGGINO*; 42 -- Assistant Controller of the trust; Vice President of
Citibank, N.A. since February, 1991.

PAUL BROOK*; 46 -- Assistant Controller of the Trust; Director of Salomon Smith
Barney; Controller or Assistant Treasurer of forty-three investment companies
associated with Citigroup; from 1997-1998 Managing Director of AMT Capital
Services Inc.; prior to 1997 Partner with Ernst & Young LLP. His address is 125
Broad Street, New York, New York 10004.

ANTHONY PACE*; 35 -- Assistant Treasurer of the trust. Mr. Pace is Vice
President -- Mutual Fund Administration for Salomon Smith Barney Inc. Since
1986, when he joined the company as a Fund Accountant, Mr. Pace has been
responsible for accounts payable, financial reporting and performance of mutual
funds and other investment products.

MARIANNE MOTLEY*; 41 -- Assistant Treasurer of the trust. Ms. Motley is Director
-- Mutual Fund Administration for Salomon Smith Barney Inc. Since 1994, when she
joined the company as a Vice President, Ms. Motley has been responsible for
accounts payable, financial reporting and performance of mutual funds and other
investment products.

ROBERT I. FRENKEL, ESQ.*; 45 -- Secretary of the trust Mr. Frenkel is a Managing
Director and General Counsel -- Global Mutual Funds for SSB Citi Asset
Management Group. Since 1994, when he joined Citibank as a Vice President and
Division Counsel, he has been responsible for legal affairs relating to mutual
funds and other investment products.

THOMAS C. MANDIA, ESQ.*; 38 -- Assistant Secretary of the trust. Mr. Mandia is
a Vice President and Associate General Counsel for SSB Citi Asset Management
Group. Since 1992, he has been responsible for legal affairs relating to
mutual funds and other investment products.

ROSEMARY D. EMMENS, ESQ.*; 30 -- Assistant Secretary of the trust. Ms. Emmens
has been a Vice President and Associate General Counsel of SSB Citi Asset
Management Group since 1998, where she has been responsible for legal affairs
relating to mutual funds and other investment products. Before joining
Citibank, Ms. Emmens was Counsel at The Dreyfus Corporation since 1995.

HARRIS GOLDBLAT, ESQ.*; 30 -- Assistant Secretary of the trust. Associate
General Counsel at SSB Citi Asset Management Group since April 2000. From June
1997 to March 2000, he was an associate at the law firm of Stroock & Stroock &
Lavan LLP, New York City, and from September 1996 to May 1997, he was an
associate at the law firm of Sills Cummis Radin Tischman Epstein & Gross,
Newark, NJ. From August 1995 to September 1996, Mr. Goldblat served as a law
clerk to the Honorable James M. Havey, P.J.A.D., in New Jersey.

The trustees and officers of the trust also hold comparable positions with
certain other funds for which Salomon Smith Barney or its affiliates serve as
the distributor or administrator.

The trustees of the trust received the following remuneration from the
sources indicated below during its fiscal year ended December 31, 1999:

<TABLE>
<CAPTION>
PENSION OR TOTAL COMPENSATION
RETIREMENT FROM TRUST
AGGREGATE BENEFITS ACCRUED ESTIMATED ANNUAL AND FUND COMPLEX
COMPENSATION AS PART OF FUND BENEFITS UPON PAID TO
TRUSTEE FROM FUND(1) EXPENSES RETIREMENT TRUSTEES(1)
------- -------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Philip W. Coolidge None None None None
Riley C. Gilley $1,696 None None $1,696
Diana R. Harrington $1,749 None None $1,749
Susan B. Kerley $1,745 None None $1,745
Heath B. McLendon None None None None
C. Oscar Morong, Jr. $1,789 None None $1,789
E. Kirby Warren $1,722 None None $1,722
William S. Woods, Jr. (2) $1,784 None None $1,734
------------
(1) Prior to September 11, 2000, the funds were part of the CitiFunds(SM) Complex. The total compensation Messrs. Coolidge,
Gilley, McLendon, Morong, Warren and Woods and Mses. Harrington and Kerley earned from the trust and the CitiFunds Complex
equaled $0, $65,250, $0, $92,000, $62,750, $66,000, $71,250, and $69,750, respectively, for the fiscal year ended 12/31/99.
Messrs. Coolidge, Gilley, McLendon, Morong and Warren and Mses. Harrington and Kerley are trustees of 48, 35, 23, 39, 39,
30, and 30 funds or portfolios, respectively, in the family of open-end registered investment companies advised or managed
by the adviser.
(2) Effective December 31, 1999, Mr. Woods became a trustee emeritus of the trust. Per the terms of the trust's trustee emeritus
plan, Mr. Woods serves the board of trustees in an advisory capacity. As a trustee emeritus, Mr. Woods is paid 50% of the
annual retainer fee and meeting fees otherwise applicable to trustees, together with reasonable out-of-pocket expenses for
each meeting attended.
</TABLE>

As of April 12, 2000, all trustees and officers as a group owned less
than 1% of the outstanding shares of the fund. The following shareholders
owned of record 5% or more of the fund's outstanding voting securities on
April 12, 2000: Class A shares: Fiserv Securities Inc., Attn: Mutual Funds,
One Commerce Square, 2005 Market Street, Suite 1200, Philadelphia, PA
19103-7042 - 25.28%; Citibank, N.A., Tailored Trust Co. Trustee, 1 Court
Square, 22nd Fl Zone 4, Attn: Jeff Jardine, Long Island City, NY 11120-0001 -
10.74%; Citibank, N.A., Tailored Trust Co. Trustee, 1 Court Square, 22nd Fl
Zone 4, Attn: Jeff Jardine, Long Island City, NY 11120-0001 - 10.74%; Class B
shares: Fiserv Securities Inc., Attn: Mutual Funds Dept., One Commerce Square,
2005 Market Street, Suite 1200, Philadelphia, PA 19103-7084 - 36.92%.

The Declaration of Trust of each of the trust and the portfolio trust
provides that the trust or the portfolio trust, as the case may be, will
indemnify its trustees and officers against liabilities and expenses incurred in
connection with litigation in which they may be involved because of their
offices with the trust or the portfolio trust, as the case may be, unless, as to
liability to the trust, the portfolio trust or their respective investors, it is
finally adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices, or
unless with respect to any other matter it is finally adjudicated that they did
not act in good faith in the reasonable belief that their actions were in the
best interests of the trust or the portfolio trust, as the case may be. In the
case of settlement, such indemnification will not be provided unless it has been
determined by a court or other body approving the settlement or other
disposition, or by a reasonable determination, based upon a review of readily
available facts, by vote of a majority of disinterested trustees of the trust or
the portfolio trust, or in a written opinion of independent counsel, that such
officers or trustees have not engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of their duties.

ADVISER

The adviser manages the assets of the portfolio pursuant to an investment
advisory agreement (the "Advisory Agreement"). Subject to such policies as the
board of trustees of the portfolio trust may determine, the adviser manages the
securities of the portfolio and makes investment decisions for the portfolio.
The adviser furnishes at its own expense all services, facilities and personnel
necessary in connection with managing the portfolio's investments and effecting
securities transactions for the portfolio. Unless otherwise terminated, the
Advisory Agreement will continue in effect as long as such continuance is
specifically approved at least annually by the board of trustees of the
portfolio trust or by a vote of a majority of the outstanding voting securities
of the portfolio, and, in either case, by a majority of the trustees of the
portfolio trust who are not parties to the Advisory Agreement or interested
persons of any such party, at a meeting called for the purpose of voting on the
Advisory Agreement.

The Advisory Agreement provides that the Adviser may render services to
others. The Advisory Agreement is terminable without penalty on not more than 60
days' nor less than 30 days' written notice by the portfolio trust when
authorized either by a vote of a majority of the outstanding voting securities
of the portfolio or by a vote of a majority of the board of trustees of the
portfolio trust, or by the Adviser on not more than 60 days' nor less than 30
days' written notice, and will automatically terminate in the event of its
assignment. The Advisory Agreement provides that neither the Adviser nor its
personnel shall be liable for any error of judgment or mistake of law or for any
loss arising out of any investment or for any act or omission in the execution
of security transactions for the portfolio, except for willful misfeasance, bad
faith or gross negligence or reckless disregard of its or their obligations and
duties under the Advisory Agreement.

For its services under the Advisory Agreement with respect to the portfolio,
the adviser receives fees, which are computed daily and paid monthly, at an
annual rate equal to 1.00% of the portfolio's average daily net assets on an
annualized basis for the fund's then-current fiscal year. This investment
advisory fee is higher than the investment advisory fees paid by most mutual
funds. The trustees of the portfolio have determined that the 1.00% investment
advisory fee is reasonable in light of the portfolio's investment policy of
investing primarily in foreign securities. The adviser may reimburse the
portfolio or waive all or a portion of its advisory fees. For the fiscal years
ended December 31, 1997, 1998 and 1999, the fees paid to the adviser under the
Advisory Agreement, after fee waivers, were $438,017, $353,752 and $348,915,
respectively.

ADMINISTRATOR

Pursuant to administrative services agreements (the "Administrative Services
Agreements"), Citibank, N.A. (the "administrator") provides the trust and the
portfolio trust, with general office facilities and the administrator supervise
the over-all administration of the trust and the portfolio trust, including,
among other responsibilities, the negotiation of contracts and fees with, and
the monitoring of performance and billings of, the trust's or the portfolio
trust's independent contractors and agents; the preparation and filing of all
documents required for compliance by the trust or the portfolio trust with
applicable laws and regulations; and arranging for the maintenance of books and
records of the trust or the portfolio trust. The administrator provides persons
satisfactory to the board of trustees of the trust or the portfolio trust to
serve as trustees and officers of the trust and the portfolio trust,
respectively. Such trustees and officers, as well as certain other employees and
trustees of the trust and the portfolio trust, may be directors, officers or
employees of the administrator or its affiliates.

The fees payable to the administrator under the Administrative Services
Agreement is 0.30% of the average daily net assets of the fund and 0.05% of the
average daily net assets of the portfolio, accrued daily and paid monthly, in
each case on an annualized basis for the fund's or the portfolio's then-current
fiscal year. However the administrator has voluntarily agreed to waive a portion
of the fees payable as necessary to maintain the projected rate of total
operating expenses. The administrator has agreed to pay certain expenses of the
fund and the portfolio. For the fiscal years ended December 31, 1997, 1998 and
1999, the fees paid by the fund to CFBDS, the former administrator of the fund,
under prior administrative services agreement, after waivers, were $79,045,
$58,123 and $62,978, respectively. For the fiscal years ended December 31, 1997,
1998 and 1999, the portfolio paid no fees, after waivers, to Signature Financial
Group (Cayman) Ltd. ("SFG"), the former administrator of the portfolio trust,
under a prior administrative services agreement with the portfolio trust.

The Administrative Services Agreements with the trust and the portfolio
trust provide that the administrator may render administrative services to
others. These Administrative Services Agreements continue in effect as to the
fund or the portfolio, as applicable, if such continuance is specifically
approved at least annually by the trust's or the portfolio trust's board of
trustees or by a vote of a majority of the outstanding voting securities of the
fund or the portfolio and, in either case, by a majority of the trustees of the
trust or portfolio trust who are not parties to the applicable Administrative
Services Agreement or interested persons of any such party. The Administrative
Services Agreements with the trust and the portfolio trust terminate
automatically if they are assigned and may be terminated by the trust or the
portfolio trust without penalty by vote of a majority of the outstanding voting
securities of the fund or portfolio, as applicable, or by either party thereto
on not more than 60 days' nor less than 30 days' written notice. The
Administrative Services Agreements with the trust and the portfolio trust also
provide that the administrator and its personnel shall not be liable for any
error of judgment or mistake of law or for any act or omission in the
administration or management of the trust or the portfolio trust, except for
willful misfeasance, bad faith or gross negligence in the performance of its or
their duties or by reason of reckless disregard of its or their obligations and
duties under the Administrative Services Agreements.

Prior to September 5, 2000, administrative services for the trust and the
portfolio trusts were provided by CFBDS and SFG, respectively.

The administrator may retain a sub-administrator.

DISTRIBUTOR

Salomon Smith Barney, Inc., located at 388 Greenwich Street, New York, New
York 10013 serves as the Funds' distributor pursuant to a written agreement
dated September 5, 2000 (the "Distribution Agreement") which was approved by the
funds' board of directors, including a majority of the independent Directors, on
June 23, 2000. This Distribution Agreement replaces the Distribution Agreement
with CFBDS, Inc.

When payment is made by an investor who has a brokerage account with a
service agent, before the settlement date, unless otherwise directed by the
investor, the funds will be held as a free credit balance in the investor's
brokerage account, and the service agent may benefit from the temporary use of
the funds. The investor may designate another use for the funds prior to
settlement date, such as investment in a money market fund (other than Salomon
Smith Barney Exchange Reserve Fund) of the Smith Barney mutual funds. If the
investor instructs the service agent to invest the funds in a Smith Barney money
market fund, the amount of the investment will be included as part of the
average daily net assets of both the fund and the money market fund, and
affiliates of Salomon Smith Barney that serve the fund in an investment advisory
capacity will benefit from the fact that they are receiving fees from both such
investment companies for managing these assets computed on the basis of their
average daily net assets. The funds' board of trustees has been advised of the
benefits to Salomon Smith Barney resulting from these settlement procedures and
will take such benefits into consideration when reviewing the Management and
Distribution Agreements for continuance.

The Distribution Agreement is terminable with or without cause, without
penalty, on 60 days' notice by the board of trustees of the trust or by vote of
holders of a majority of the fund's outstanding voting securities, or on 90
days' notice by Salomon Smith Barney. Unless otherwise terminated, each
Distribution Agreement shall continue for successive annual periods so long as
such continuance is specifically approved at least annually by (a) the trust's
board of trustees, or (b) by a vote of a majority (as defined in the 1940 Act)
of the fund's outstanding voting securities, provided that in either event the
continuance is also approved by a majority of the board members of the trust who
are not interested persons (as defined in the 1940 Act) of any party to the
Distribution Agreement, by vote cast in person at a meeting called for the
purpose of voting on such approval. The Distribution Agreements will terminate
automatically in the event of their assignment, as defined in the 1940 Act and
the rules and regulations thereunder.

Class A, B and L of the fund have each adopted a Distribution Plan (each, a
"Distribution Plan") in accordance with Rule 12b-1 under the 1940 Act with
respect to shares of the fund after concluding that there is a reasonable
likelihood that a Distribution Plan will benefit the fund and its shareholders.
The Distribution Plan with respect to Class A shares provides that the fund
shall pay a monthly distribution fee to the distributor at an annual rate not to
exceed 0.10%, in the aggregate, of the fund's average daily net assets with
respect to Class A shares. The distributor receives distribution fees for its
services under the Distribution Agreement with respect to Class A shares in
connection with the distribution of Class A fund shares (exclusive of any
advertising expenses incurred by the distributor in connection with the sale of
shares). The distributor may use all or any portion of such distribution fee to
pay for expenses of printing prospectuses and reports used for sales purposes,
expenses of the preparation and printing of sales literature and other such
expenses related to the distribution of Class A shares. The Distribution Plan
with respect to Class A shares also permits the fund to pay the distributor an
additional fee (not to exceed 0.05%, in the aggregate, of the average daily net
assets of the fund with respect to Class A shares) in anticipation of or as
reimbursement for print or electronic media advertising expenses incurred. The
fund did not pay this fee during its most recent fiscal year and does not
anticipate paying it during the current fiscal year. The distributor receives a
fee, not to exceed 1.00%, in the aggregate, of the average daily net assets of
the fund attributable to Class B and L shares. Such fees may be used to make
payments to the distributor for distribution services, to service agents that
have entered into service agreements with the distributor and others in respect
of the sale of Class B shares of the fund, and to other parties in respect of
the sale of Class B shares of the fund, and to make payments for advertising,
marketing or other promotional activity, and payments for preparation, printing,
and distribution of prospectuses, statements of additional information and
reports for recipients other than regulators and existing shareholders. The fund
also may make payments to the distributor, service agents and others for
providing personal service or the maintenance of shareholder accounts. The
amounts paid by the distributor to each recipient may vary based upon certain
factors, including, among other things, the levels of sales of fund shares
and/or shareholder services provided. Recipients may receive different
compensation for sales for Class A and Class B shares.

Each Distribution Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
trustees and a majority of the trustees who are not "interested persons" (as
defined in the 1940 Act) of the trust and who have no direct or indirect
financial interest in the operation of the Distribution Plans or in any
agreement related to the Plans (for purposes of this paragraph "qualified
trustees"). Each Distribution Plan requires that the trust and the distributor
provide to the board of trustees and the board of trustees review, at least
quarterly, a written report of the amounts expended (and the purposes therefor)
under the Distribution Plans. Each Distribution Plan further provides that the
selection and nomination of the qualified trustees is committed to the
discretion of the qualified trustees then in office who are not interested
trustees of the trust. A Distribution Plan may be terminated with respect to any
class of the fund at any time by a vote of a majority of the trust's qualified
trustees or by a vote of a majority of the outstanding voting securities of that
class. A Distribution Plan may not be amended to increase materially the amount
of permitted expenses of the class thereunder without the approval of a majority
of the outstanding securities of that class and may not be materially amended in
any case without a vote of a majority of both the trustees and qualified
trustees. The distributor will preserve copies of any plan, agreement or report
made pursuant to the Distribution Plans for a period of not less than six years
from the date of each Plan, and for the first two years the distributor will
preserve such copies in an easily accessible place.

As contemplated by the Distribution Plans, the distributor acts as the agent
of the trust in connection with the offering of shares of the fund pursuant to
the Distribution Agreements. After the prospectuses and periodic reports of the
fund have been prepared, set in type and mailed to existing shareholders, the
distributor pays for the printing and distribution of copies thereof which it
uses in connection with the offering of shares of the fund to prospective
investors. For the fiscal years ended December 31, 1997, 1998 and 1999, the fees
paid to CFBDS, the former distributor of the fund, under a prior distribution
agreement with respect to Class A shares of the fund were $27,121, $19,374 and
$0, respectively, no portion of which was applicable to reimbursement for
expenses incurred in connection with print or electronic media advertising. For
the period January 4, 1999 (commencement of operations) to December 31, 1999,
the fees paid to CFBDS under a prior distribution agreement with respect to
Class B shares of the fund were $1,420. There were no Class L or Class Y shares
outstanding in 1999. All of the foregoing amounts paid under the Distribution
Plans were spent on printing and mailing expenses.

The distributor may enter into agreements with service agents and may pay
compensation to such service agents for accounts for which the service agents
are holders of record. The distributor may make payments for distribution and/
or shareholder servicing activities out of its past profits and other available
sources. The distributor may also make payments for marketing, promotional or
related expenses to dealers. The amount of these payments are determined by the
distributor and may vary. Citibank or its affiliates may make similar payments
under similar arrangements.

CODE OF ETHICS

The trust, the portfolio trust, the adviser and the distributor each have
adopted a code of ethics pursuant to Rule 17j-1 under the 1940 Act. Each code of
ethics permits personnel subject to such code to invest in securities, including
securities that may be purchased or held by the fund. However, the codes of
ethics contain provisions and requirements designed to identify and address
certain conflicts of interest between personal investment activities and the
interests of the fund. Of course, there can be no assurance that the codes of
ethics will be effective in identifying and addressing all conflicts of interest
relating to personal securities transactions.

EXPENSES

In addition to amounts payable under its Investment Advisory Agreement, the
Administrative Services Plan and the Distribution Plans, the fund is responsible
for its own expenses, including, among other things, the costs of securities
transactions, the compensation of trustees that are not affiliated with the
adviser or the fund's distributor, government fees, taxes, accounting and legal
fees, expenses of communication with shareholders, interest expense, and
insurance premiums.

The administrator has agreed to pay the fund's ordinary operating expenses
(excluding interest, taxes, brokerage commission, litigation costs or other
extraordinary costs and expenses and excluding the fees paid under the Fund's
Investment Advisory Agreement, Administrative Services Agreement, Distribution
Agreements and Service Agreements). The administrator receives a fee from the
fund, in addition to the administrative services, estimated and accrued daily
and paid monthly in an amount such that immediately after any such payment the
aggregate ordinary operating expenses of the fund would not on a per annum basis
exceed an agreed upon rate of the fund's average daily net assets. For the
fiscal year ended December 31, 1999, CFBDS paid expenses of the fund in the
amount of $195,158, and the fund paid CFBDS the amount of $42,645. For that
fiscal year, the total expenses of Class A shares and Class B shares
(commencement of operations, January 4, 1999) were 1.75% and 2.50%,
respectively, of their average daily assets. There were no Class L or Class Y
shares outstanding in 1999. The agreement of the administrator to pay the
ordinary operating expenses of the fund, as well as the obligation of the fund
to pay any corresponding fee to the administrator, may be terminated by either
the administrator or the fund upon not less than 30 days nor more than 60 days
written notice.

SERVICE AGENTS.

The trust has adopted an administrative services plan (the "Administrative
Services Plan") after having concluded that there is a reasonable likelihood
that the Administrative Services Plan will benefit the fund and its
shareholders. The Administrative Services Plan provides that the trust may
obtain the services of an administrator, a transfer agent, a custodian, a fund
accountant and one or more service agents, and may enter into agreements
providing for the payment of fees for such services. Under the Trust's
Administrative Services Plan, the total of the fees paid from the fund to the
trust's administrator and service agents with respect to Class A shares may not
exceed 0.65% of the fund's average daily net assets on an annualized basis for
the fund's then-current fiscal year. Distribution fees (other than any fee
concerning electronic or media advertising) paid under the Distribution Plan
with respect to the Class A shares are included in this percentage limitation.
Within this overall limitation, individual fees may vary. Distribution fees may
be used to offset the fund's marketing costs, such as preparation of sales
literature, advertising, and printing and distributing prospectuses and other
shareholder materials to prospective investors, and to pay costs related to
distribution activities, including employee salaries, bonuses and other overhead
expenses.

The Administrative Services Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
trustees and a majority of the trustees who are not "interested persons" of the
trust and who have no direct or indirect financial interest in the operation of
the Administrative Services Plan or in any agreement related to such Plan (for
purposes of this paragraph "qualified trustees"). The Administrative Services
Plan requires that the trust provide to its board of trustees and the board of
trustees review, at least quarterly, a written report of the amounts expended
(and the purposes therefor) under the Administrative Services Plan. The
Administrative Services Plan may be terminated at any time by a vote of a
majority of the qualified trustees of the trust or as to a class by a vote of a
majority of the outstanding voting securities of that class. The Administrative
Services Plan for the fund may not be materially amended in any case without a
vote of the majority of both the trustees and the qualified trustees.

The trust has entered into a shareholder servicing agreement (a "Shareholder
Servicing Agreement") with each service agent pursuant to such that service
agent provides shareholder services, including answering customer inquiries,
assisting in processing purchase, exchange and redemption transactions and
furnishing fund communications to shareholders. Some service agents may impose
certain conditions on their customers in addition to or different from those
imposed by the fund, such as requiring a minimum initial investment or charging
their customers a direct fee for their services. Each service agent has agreed
to transmit to its customers who are shareholders of the fund appropriate prior
written disclosure of any fees that it may charge them directly and to provide
written notice at least 30 days prior to imposition of any transaction fees.
Service agents that sell Class A shares or Class B shares receive a shareholder
servicing fee payable on such shares at an annual rate equal to, as applicable,
0.25% of the average daily net assets represented by such Class A shares and/or
0.15% of the average daily net assets represented by such Class B shares. For
the fiscal years ended December 31, 1997, 1998 and 1999, the aggregate fees paid
to service agents under the Service Agreements with respect to Class A Shares of
the fund, after waivers, were $67,802, $48,436 and $52,604, respectively. For
the period from January 4, 1999 (commencement of operations) to December 31,
1999, the aggregate fees paid to service agents under the Shareholder Servicing
Agreements with respect to Class B shares of the fund, after waivers, were $0.
There were no Class L or Class Y shares outstanding in 1999.

TRANSFER AGENT

The trust has also entered into a Transfer Agency and Service Agreement with
Citi Fiduciary Trust Company ("Citi"), an affiliate of Salomon Smith Barney,
pursuant to which Citi acts as transfer agent. Under the Transfer Agency and
Service Agreement, Citi Fiduciary maintains the shareholder account records for
the fund, handles certain communications between shareholders and the fund and
distriutes dividends and distributions payable by the fund. For these services,
Citi Fiduciary receives a monthly fee computed on the basis of the number of
shareholder accounts it maintains for the fund during the month and is
reimbursed for out-of-pocket expenses.

PFPC Global Fund Services ("PFPC") acts as sub-transfer agent pursuant to an
agreement with Citi. Under the sub-transfer agency agreement, the sub-transfer
agent maintains the shareholder account records for the fund, handles certain
communications between shareholder and the fund, and distributes dividends and
distributions payable by the fund. For these services, the sub-transfer agent
receives a monthly fee computed on the basis of the number of shareholder
accounts it maintains for the fund during the month, and is reimbursed for
out-of-pocket expenses.

The principal place of business of Citi is 388 Greenwich Street, New York,
New York 10013. The principal place of business of PFPC is P.O. Box 9699,
Providence, Rhode Island 02940-9699.

CUSTODIAN

The trust, on behalf of the fund, has also entered into a Custodian
Agreement and a Fund Accounting Agreement with State Street Bank and Trust
Company ("State Street") pursuant to which custodial and fund accounting
services, respectively, are provided for the fund. Among other things, State
Street calculates the daily net asset value for the fund. Securities may be held
by a sub-custodian bank approved by the trustees.

The portfolio trust has also adopted an administrative services plan (the
"Portfolio Administrative Plan"), which provides that the portfolio trust may
obtain the services of an administrator, a transfer agent, a custodian and a
fund accountant and may enter into agreements providing for the payment of fees
for such services. Under the Portfolio Administrative Plan, the administrative
services fee payable to the administrator from the portfolio may not exceed
0.05% of the portfolio's average daily net assets on an annualized basis for its
then-current fiscal year.

The Portfolio Administrative Plan continues in effect if such continuance is
specifically approved at least annually by a vote of both a majority of the
portfolio trust's trustees and a majority of the portfolio trust's trustees who
are not "interested persons" of the portfolio and who have no direct or indirect
financial interest in the operation of the Portfolio Administrative Plan or in
any agreement related to such Plan (for purposes of this paragraph "qualified
trustees"). The Portfolio Administrative Plan requires that the portfolio trust
provide to the board of trustees and the board of trustees review, at least
quarterly, a written report of the amounts expended (and the purposes therefor)
under the Portfolio Administrative Plan. The Portfolio Administrative Plan may
not be amended to increase materially the amount of permitted expenses
thereunder without the approval of a majority of the outstanding voting
securities of the portfolio trust and may not be materially amended in any case
without a vote of the majority of both the portfolio trust's trustees and the
portfolio trust's qualified trustees.

The portfolio trust, on behalf of the portfolio, has entered into a
Custodian Agreement with State Street pursuant to which custodial services are
provided for the portfolio. The portfolio trust, on behalf of the portfolio, has
also entered into a Fund Accounting Agreement with State Street Cayman Trust
Company, Ltd. ("State Street Cayman") pursuant to which State Street Cayman
provides fund accounting services for the portfolio. State Street Cayman also
provides transfer agency services to the portfolio trust.

The principal business address of State Street is 225 Franklin Street,
Boston, Massachusetts 02110. The principal business address of State Street
Cayman is P.O. Box 2508 GT Grand Cayman, Cayman Islands, British West Indies.

AUDITORS

PricewaterhouseCoopers LLP are the independent accountants for the trust,
providing audit services and assistance and consultation with respect to the
preparation of filings with the SEC. The address of PricewaterhouseCoopers LLP
is 160 Federal Street, Boston, Massachusetts 02110. PricewaterhouseCoopers LLP
are the chartered accountants for the portfolio trust. The address of
PricewaterhouseCoopers LLP is Suite 3000, Box 82, Royal Trust Towers, Toronto
Dominion Center, Toronto, Ontario, Canada M5K 1G8.

COUNSEL

Bingham Dana LLP, 150 Federal Street, Boston, MA 02110, serves as counsel
for the fund.

9. PORTFOLIO TRANSACTIONS

The portfolio trust trades securities for the portfolio if it believes that
a transaction net of costs (including custodian charges) will help achieve the
portfolio's investment objective. Changes in the portfolio's investments are
made without regard to the length of time a security has been held or whether a
sale would result in the recognition of a profit or loss. Therefore, the rate of
turnover is not a limiting factor when changes are appropriate. For the fiscal
years ended December 31, 1998 and December 31, 1999, the turnover rates for the
portfolio were 118% and 68%, respectively. The amount of brokerage commissions
and realization of taxable capital gains will tend to increase as the level of
portfolio activity increases. Specific decisions to purchase or sell securities
for the portfolio are made by a portfolio manager who is an employee of the
Adviser and who is appointed and supervised by its senior officers. The
portfolio manager may serve other clients of the Adviser in a similar capacity.

The primary consideration in placing portfolio securities transactions with
broker-dealers for execution is to obtain and maintain the availability of
execution at the most favorable prices and in the most effective manner
possible. The Adviser attempts to achieve this result by selecting
broker-dealers to execute transactions on behalf of the portfolio and other
clients of the Adviser on the basis of their professional capability, the value
and quality of their brokerage services, and the level of their brokerage
commissions. In the case of securities traded in the over-the-counter market
(where no stated commissions are paid but the prices include a dealer's markup
or markdown), the Adviser normally seeks to deal directly with the primary
market makers, unless in its opinion, best execution is available elsewhere. In
the case of securities purchased from underwriters, the cost of such securities
generally includes a fixed underwriting commission or concession. From time to
time, soliciting dealer fees are available to the adviser on the tender of the
portfolio's securities in so-called tender or exchange offers. Such soliciting
dealer fees are in effect recaptured for the portfolio by the adviser. At
present no other recapture arrangements are in effect.

In connection with the selection of brokers or dealers and the placing of
portfolio securities transactions, brokers or dealers may be selected who also
provide brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the fund and/or the other
accounts over which the adviser or its affiliates exercise investment
discretion. The adviser is authorized to pay a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for the fund which is in excess of the amount of commission another
broker or dealer would have charged for effecting that transaction if the
adviser determines in good faith that such amount of commission is reasonable in
relation to the value of the brokerage and research services provided by such
broker or dealer. This determination may be viewed in terms of either that
particular transaction or the overall responsibilities which the adviser and its
affiliates have with respect to accounts over which they exercise investment
discretion. The trustees of the trust periodically review the commissions paid
by the fund to determine if the commissions paid over representative periods of
time were reasonable in relation to the benefits to the fund.

The investment advisory fee that the portfolio pays to the adviser will not
be reduced as a consequence of the adviser's receipt of brokerage and research
services. While such services are not expected to reduce the expenses of the
adviser, the adviser would, through the use of the services, avoid the
additional expenses which would be incurred if it should attempt to develop
comparable information through its own staff or obtain such services
independently.

In certain instances there may be securities that are suitable as an
investment for the portfolio as well as for one or more of the adviser's other
clients. Investment decisions for the portfolio and for the adviser's other
clients are made with a view to achieving their respective investment
objectives. It may develop that a particular security is bought or sold for only
one client even though it might be held by, or bought or sold for, other
clients. Likewise, a particular security may be bought for one or more clients
when one or more clients are selling the same security. Some simultaneous
transactions are inevitable when several clients receive investment advice from
the same investment adviser, particularly when the same security is suitable for
the investment objectives of more than one client. When two or more clients are
simultaneously engaged in the purchase or sale of the same security, the
securities are allocated among clients in a manner believed to be equitable to
each. It is recognized that in some cases this system could adversely affect the
price of or the size of the position obtainable in a security for the portfolio.
When purchases or sales of the same security for the portfolio and for other
portfolios managed by the adviser occur contemporaneously, the purchase or sale
orders may be aggregated in order to obtain any price advantages available to
large volume purchases or sales.

For the fiscal years ended December 31, 1997, 1998 and 1999, the portfolio
paid brokerage commissions in the amount of $215,467, $167,104 and $137,501,
respectively.

10. DESCRIPTION OF SHARES, VOTING RIGHTS AND LIABILITIES

The trust's Declaration of Trust permits the trust to issue an unlimited
number of full and fractional shares of beneficial interest (par value $0.00001
per share) of each series and to divide or combine the shares of any series into
a greater or lesser number of shares of that series without thereby changing the
proportionate beneficial interests in that series and to divide such shares into
classes. The trust has reserved the right to create and issue additional series
and classes of shares. Each share of each class represents an equal
proportionate interest in the fund with each other share of that class. Shares
of each series of the trust participate equally in the earnings, dividends and
distribution of net assets of the particular series upon liquidation or
dissolution (except for any differences between classes of shares of a series).
Shares of each series are entitled to vote separately to approve advisory
agreements or changes in investment policy, and shares of a class are entitled
to vote separately to approve any distribution or service arrangements relating
to that class, but shares of all series may vote together in the election or
selection of trustees and accountants for the trust. In matters affecting only a
particular series or class, only shares of that series or class are entitled to
vote.

Shareholders are entitled to one vote for each share held on matters on
which they are entitled to vote. Shareholders in the trust do not have
cumulative voting rights, and shareholders owning more than 50% of the
outstanding shares of the trust may elect all of the trustees of the trust if
they choose to do so and in such event the other shareholders in the trust would
not be able to elect any trustee. The trust is not required to hold, and has no
present intention of holding, annual meetings of shareholders but the trust will
hold special meetings of shareholders when in the judgment of the trustees it is
necessary or desirable to submit matters for a shareholder vote. Shareholders
have, under certain circumstances (e.g., upon the application and submission of
certain specified documents to the trustees by a specified number of
shareholders), the right to communicate with other shareholders in connection
with requesting a meeting of shareholders for the purpose of removing one or
more trustees. Shareholders also have under certain circumstances the right to
remove one or more trustees without a meeting by a declaration in writing by a
specified number of shareholders. No material amendment may be made to the
trust's Declaration of Trust without the affirmative vote of the holders of a
majority of the outstanding shares of each series affected by the amendment.
(See "Investment Restrictions.") The trust's Declaration of Trust provides that,
at any meeting of shareholders of the trust or of any series of the trust, a
service agent may vote any shares of which it is the holder of record and for
which it does not receive voting instructions proportionately in accordance with
the instructions received for all other shares of which that service agent is
the holder of record. Shares have no preference, pre-emptive, conversion or
similar rights. Shares, when issued, are fully paid and non-assessable, except
as set forth below.

The trust may enter into a merger or consolidation, or sell all or
substantially all of its assets (or all or substantially all of the assets
belonging to any series of the trust), if approved by a vote of the holders of
two-thirds of the trust's outstanding shares, voting as a single class, or of
the affected series of the trust, as the case may be, except that if the
trustees of the trust recommend such sale of assets, merger or consolidation,
the approval by vote of the holders of a majority of the trust's outstanding
shares (or the affected series) would be sufficient. The trust or any series of
the trust, as the case may be, may be terminated (i) by a vote of a majority of
the outstanding voting securities of the trust or the affected series or (ii) by
the trustees by written notice to the shareholders of the trust or the affected
series. If not so terminated, the trust will continue indefinitely.

The fund's transfer agent maintains a share register for shareholders of
record. The fund does not issue share certificates unless a written request
signed by all registered owners is made to the sub-transfer agent.

The trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations and liabilities. However, the Declaration of Trust of the trust
contains an express disclaimer of shareholder liability for acts or obligations
of the trust and provides for indemnification and reimbursement of expenses out
of trust property for any shareholder held personally liable for the obligations
of the trust. The Declaration of Trust of the trust also provides that the trust
may maintain appropriate insurance (e.g., fidelity bonding, and errors and
omissions insurance) for the protection of the trust, its shareholders,
trustees, officers, employees and agents covering possible tort and other
liabilities. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which both inadequate
insurance existed and the trust itself was unable to meet its obligations.

The trust's Declaration of Trust further provides that obligations of the
trust are not binding upon the trustees individually but only upon the property
of the trust and that the trustees will not be liable for any action or failure
to act, but nothing in the Declaration of Trust of the trust protects a trustee
against any liability to which he or she would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his or her office.

The portfolio is a series of the portfolio trust, organized as a trust under
the laws of the State of New York. The portfolio trust's Declaration of Trust
provides that investors in the portfolio (e.g., other investment companies
(including the fund), insurance company separate accounts and common and
commingled trust funds) are each liable for all obligations of the portfolio.
However, the risk of the fund incurring financial loss on account of such
liability is limited to circumstances in which both inadequate insurance existed
and the portfolio itself was unable to meet its obligations. It is not expected
that the liabilities of the portfolio would ever exceed its assets.

Each investor in the portfolio, including the fund, may add to or withdraw
from its investment in the portfolio on each business day. As of the close of
regular trading on each Business Day, the value of each investor's beneficial
interest in the portfolio is determined by multiplying the net asset value of
the portfolio by the percentage, effective for that day, that represents that
investor's share of the aggregate beneficial interests in the portfolio. Any
additions or withdrawals, that are to be effected on that day, are then
effected. The investor's percentage of the aggregate beneficial interests in the
portfolio is then re-computed as the percentage equal to the fraction (i) the
numerator of which is the value of such investor's investment in the portfolio
as of the close of regular trading on such day plus or minus, as the case may
be, the amount of any additions to or withdrawals from the investor's investment
in the portfolio effected on such day, and (ii) the denominator of which is the
aggregate net asset value of the portfolio as of the close of regular trading on
such day plus or minus, as the case may be, the amount of the net additions to
or withdrawals from the aggregate investments in the portfolio by all investors
in the portfolio. The percentage so determined is then applied to determine the
value of the investor's interest in the portfolio as of the close of regular
trading on the next following business day.

11. TAX MATTERS

TAXATION OF THE FUND AND PORTFOLIO

FEDERAL TAXES. The fund has elected to be treated, and intends to qualify
each year, as a "regulated investment company" under Subchapter M of the
Internal Revenue Code of 1986, as amended (the "Code"), by meeting all
applicable requirements of Subchapter M, including requirements as to the nature
of the fund's gross income, the amount of fund distributions, and the
composition of the fund's portfolio assets. Provided all such requirements are
met, no U.S. federal income or excise taxes generally will be required to be
paid by the fund. If the fund should fail to qualify as a "regulated investment
company" for any year, the fund would incur a regular corporate federal income
tax upon its taxable income and fund distributions would generally be taxable as
ordinary income to shareholders. The portfolio trust believes the portfolio also
will not be required to pay any U.S. federal income taxes on its income.

FOREIGN TAXES. Investment income and gains received by the fund from non-
U.S. securities may be subject to non-U.S. taxes. The United States has entered
into tax treaties with many other countries that may entitle the fund to a
reduced rate of tax or an exemption from tax on such income. The fund intends to
qualify for treaty reduced rates where available. It is not possible, however,
to determine the fund's effective rates of non-U.S. tax in advance since the
amount of the fund's assets to be invested within various countries is not
known.

If the fund holds more than 50% of its assets in foreign stock and
securities at the close of its taxable year, the fund may elect to "pass
through" to the fund's shareholders foreign income taxes paid. If the fund so
elects, shareholders will be required to treat their pro rata portion of the
foreign income taxes paid by the fund as part of the amount distributed to them
by the fund and thus includable in their gross income for federal income tax
purposes. Shareholders who itemize deductions would then be allowed to claim a
deduction or credit (but not both) on their federal income tax returns for such
amount, subject to certain limitations. Shareholders who do not itemize
deductions would (subject to such limitations) be able to claim a credit but not
a deduction. No deduction will be permitted to individuals in computing their
alternative minimum tax liability. If the fund does not qualify to elect to
"pass through" to its shareholders foreign income taxes paid by it, shareholders
will not be able to claim any deduction or credit for any part of their foreign
taxes paid by the fund.

TAXATION OF SHAREHOLDERS

TAXATION OF DISTRIBUTIONS. Shareholders of the fund will generally have to
pay federal income taxes and any state or local taxes on the dividends and
capital gain distributions they receive from the fund. Dividends from ordinary
income and any distributions from net short-term capital gains are taxable to
shareholders as ordinary income for federal income tax purposes, whether the
distributions are made in cash or in additional shares. Distributions of net
capital gains (i.e., the excess of net long-term capital gains over net
short-term capital losses), whether made in cash or in additional shares, are
taxable to shareholders as long-term capital gains without regard to the length
of time the shareholders have held their shares. Any fund dividend that is
declared in October, November, or December of any calendar year, that is payable
to shareholders of record in such a month, and that is paid the following
January, will be treated as if received by the shareholders on December 31 of
the year in which the dividend is declared.

Any fund distribution will have the effect of reducing the per share net
asset value of shares in the fund by the amount of the distribution.
Shareholders purchasing shares shortly before the record date of any
distribution may thus pay the full price for the shares and then effectively
receive a portion of the purchase price back as a taxable distribution.

DIVIDENDS-RECEIVED DEDUCTION. The portion of the fund's ordinary income
dividends attributable to dividends received in respect of equity securities of
U.S. issuers is normally eligible for the dividends received deduction for
corporations subject to U.S. federal income taxes. Availability of the deduction
for particular shareholders is subject to certain limitations, and deducted
amounts may be subject to the alternative minimum tax and result in certain
basis adjustments.

WITHHOLDING TAX PAYMENTS FOR NON-U.S. PERSONS. The fund will withhold tax
payments at the rate of 30% (or any lower rate permitted under an applicable
treaty) on taxable dividends and other payments subject to withholding taxes
that are made to persons who are not citizens or residents of the United States.
Distributions received from the fund by non-U.S. persons also may be subject to
tax under the laws of their own jurisdiction.

BACKUP WITHHOLDING. The account application asks each new shareholder to
certify that the shareholder's Social Security or taxpayer identification number
is correct and that the shareholder is not subject to 31% backup withholding for
failing to report income to the IRS. If a shareholder fails to provide this
information, or otherwise violates IRS regulations, the fund may be required to
withhold tax at the rate of 31% on certain distributions and redemption proceeds
paid to that shareholder. Backup withholding will not, however, be applied to
payments that have been subject to 30% withholding.

DISPOSITION OF SHARES. In general, any gain or loss realized upon a taxable
disposition of shares of the fund by a shareholder that holds such shares as a
capital asset will be treated as a long-term capital gain or loss if the shares
have been held for more than twelve months and otherwise as a short-term capital
gain or loss. However, any loss realized upon a disposition of shares in the
fund held for six months or less will be treated as a long-term capital loss to
the extent of any distributions of net capital gain made with respect to those
shares. Any loss realized upon a disposition of shares may also be disallowed
under rules relating to wash sales. Gain may be increased (or loss reduced) upon
a redemption of Class A fund shares held for 90 days or less followed by any
purchase of shares of the fund or of another Smith Barney mutual fund, including
purchases by exchange or by reinvestment, without payment of a sales charge
which would otherwise apply because of any sales charge paid on the original
purchase of the Class A fund shares.

EFFECTS OF CERTAIN INVESTMENTS AND TRANSACTIONS

OPTIONS, ETC. The fund's transactions in forward contracts, short sales
"against the box," and options will be subject to special tax rules that may
affect the amount, timing and character of fund income and distributions to
shareholders. For example, certain positions held by the fund on the last
business day of each taxable year will be marked to market (i.e., treated as if
closed out) on that day, and any gain or loss associated with the positions will
be treated as 60% long-term and 40% short-term capital gain or loss. Certain
positions held by the fund that substantially diminish its risk of loss with
respect to other positions in its portfolio may constitute "straddles," and may
be subject to special tax rules that would cause deferral of fund losses,
adjustments in the holding periods of fund securities, and conversion of
short-term into long-term capital losses. Certain tax elections exist for
straddles that may alter the effects of these rules. The fund intends to limit
its activities in forward contracts and options to the extent necessary to meet
the requirements of Subchapter M of the Code.

FOREIGN INVESTMENTS. Special tax considerations apply with respect to non-
U.S. investments of the fund. Foreign exchange gains and losses realized by the
fund will generally be treated as ordinary income and loss. Use of non- U.S.
currencies for non-hedging purposes and investment by the fund in certain
"passive foreign investment companies" may have to be limited in order to avoid
a tax on the fund. The fund may elect to mark to market any investments in
"passive foreign investment companies" on the last day of each taxable year.
This election may cause the fund to recognize ordinary income prior to the
receipt of cash payments with respect to those investments; in order to
distribute this income and avoid a tax on the fund, the fund may be required to
liquidate portfolio securities that it might otherwise have continued to hold,
potentially resulting in additional taxable gain or loss to the fund.

12. FINANCIAL STATEMENTS

The audited financial statements of the fund (Statement of Assets and
Liabilities at December 31, 1999, Statement of Operations for the year ended
December 31, 1999, Statement of Changes in Net Assets for each of the years in
the two-year period ended December 31, 1999, Financial Highlights for each of
the years in the five-year period ended December 31, 1999, Notes to Financial
Statements and Independent Auditors' Report), each of which is included in the
Annual Report to Shareholders of the fund, are incorporated by reference into
this Statement of Additional Information and have been so incorporated in
reliance upon the reports of PricewaterhouseCoopers LLP independent accountants,
on behalf of the fund.

The audited financial statements of the International Equity Portfolio
(Portfolio of Investments at December 31, 1999, Statement of Assets and
Liabilities at December 31, 1999, Statement of Operations for the fiscal year
ended December 31, 1999, Statement of Changes in Net Assets for the fiscal years
ended December 31, 1999 and 1998, Financial Highlights for each of the years in
the five-year period ended December 31, 1999, Notes to Financial Statements and
Independent Auditors' Report), each of which is included in the Annual Report to
Shareholders of Smith Barney International Large Cap Fund, are incorporated by
reference into this Statement of Additional Information and have been so
incorporated in reliance upon the reports of PricewaterhouseCoopers LLP,
chartered accountants, on behalf of the portfolio.

A copy of the Annual Report for the fund accompanies this Statement of
Additional Information.

<PAGE>

CITIFUNDS INTERNATIONAL GROWTH & INCOME PORTFOLIO

INVESTMENT MANAGER
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

DISTRIBUTOR
Salomon Smith Barney Inc.
388 Greenwich Street, New York, New York 10013

TRANSFER AGENT
Citi Fiduciary Trust Company
388 Greenwich Street, New York, NY 10013

SUB-TRANSFER AGENT
PFPC Global Fund Services
P.O. Box 9699, Providence, RI 02940-9699

CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

AUDITORS
PricewaterhouseCoopers LLP
160 Federal Street, Boston, MA 02110

LEGAL COUNSEL
Bingham Dana LLP
150 Federal Street, Boston, MA 02110